How an Override Works:
· An override must be used for the specified purpose the year it is implemented.
· After the first year, it becomes part of the future tax basis to be allocated as determined by the voters.
· The basis grows like compound interest, at 2.5% each year.
This table shows the rate of increase on the $600,000 override over the past 25 years:
Fiscal Year Tax Levy (Compounded) Increase above Override
2001 $600,000.00
2002 $615,000.00 $15,000.00
2003 $630,375.00 $30,375.00
2004 $646,134.38 $46,134.38
2005 $662,287.73 $62,287.73
2006 $678,844.93 $78,844.93
2007 $695,816.05 $95,816.05
2008 $713,211.45 $113,211.45
2009 $731,041.74 $131,041.74
2010 $749,317.78 $149,317.78
2011 $768,050.73 $168,050.73
2012 $787,251.99 $187,251.99
2013 $806,933.29 $206,933.29
2014 $827,106.63 $227,106.63
2015 $847,784.29 $247,784.29
2016 $868,978.90 $268,978.90
2017 $890,703.37 $290,703.37
2018 $912,970.96 $312,970.96
2019 $935,795.23 $335,795.23
2020 $959,190.11 $359,190.11
2021 $983,169.86 $383,169.86
2022 $1,007,749.11 $407,749.11
2023 $1,032,942.84 $432,942.84
2024 $1,058,766.41 $458,766.41
2025 $1,085,235.57 $485,235.57
2026 $1,112,366.46 $512,366.46
If the budget impact was only $600,000 per year, the total tax levy to date from this override would total $15,600,000 ($600,000 x 26 years).
However, since it compounds each year, increasing to the limit of 2.5%, the total tax levy for the past 26 years from this override is $21,607,024.82. This is $6,007,024.82 in additional increases.
Sometimes it is necessary to consider an override, however, it is important to understand the long-term impact. For trash, a non-compounding fee could maintain trash and keep costs down.
The escalator on a tax override is significant, illustrating the importance of having all the details and information required to make a fact-based decision.
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