MARCO ISLAND — You can use the same numbers and paint a different picture. Former Marco finance director and current city financial consultant, Bill Harrison, provided the city’s financial planning committee with graphs of Marco’s recent tax history and the options for 2010, working with an anticipated 10 percent reduction in Island taxable property values.
Harrison also compared the City of Naples to the City of Marco Island. Naples raises 48.5 percent of their general fund dollars from property taxes. Marco raises 74.8 percent of their general fund dollars from property taxes.
During Harrison’s February presentation to the committee, he said Marco is too dependent on property taxes.
Several members of the Marco Island Taxpayers’ Association disagree and would prefer 100 percent of city services were paid for through property taxes. The reason — property taxes can be itemized and deducted from federal income taxes. Dollars generated from property taxes are also subject to the city’s spending cap, which has kept Marco a lean government by reducing growth in city spending to 3 percent plus a cost of living adjustment each year.
Harrison’s “tax comparison to Naples” document used the example of a home with a $500,000 taxable property value.
Naples’ millage rate is 1.1315, or about $1.13 per $1,000 of property value. Marco’s millage rate is 1.3917, or about $1.39 per $1,000 of taxable property.
So the Marco homeowner would pay $695.85 in property taxes while the Naples homeowner would be $565.75 in property taxes.
That sounds good, but the Naples resident isn’t done paying.
The Naples taxpayer would also pay about 6 percent of their utility bill for payment-in-lieu of tax for about $85.68, an electric franchise fee of 6 percent on electric bills for about $141.60, a utility tax of 6 percent for about $144 and a stormwater utility fee of about $142.08.
At the end of the day, the Naples resident pays $1,079.11 total in property taxes combined with the four other taxes or fees. Meanwhile, the Marco resident still pays $695.85 in property taxes without those fees.
A different conclusion may be drawn when the figures are put into perspective. Numbers can be misleading. Assume Marco had the same fees and taxes as Naples. The results: A Marco single family resident’s general fund support would be $1,209.21 and from Naples $1,079.11. The percentage from property taxes on Marco would be 130 percent and from Naples 92.5 percent.
Property taxes are federal tax deductible and other fees and surcharges are not.
Assume ad valorem taxes for Marco Island are 100 percent: Marco would pay $930.28 for the general fund compared to a Naples contribution of $1,079.11 to the general fund.
Naples taxpayers would only get to deduct $565.45 from their property taxes while Marco taxpayers could deduct the full $930.28.
Taxpayers will have no control, will pay more and get to deduct less if the city chooses to impose fees, surcharges, utility taxes or payment in lieu of taxes.