Property taxes in Kootenai County are headed upward, according to Ed Morse.

The Coeur d’Alene real estate appraiser contends that even though the county commissioners voted against adopting any of the allowable 3 percent tax raise, property owners should still expect tax bumps this new fiscal year.

“They (property owners) have no idea it’s coming, because of lack of publicity,” Morse said.

But Kootenai County officials say Morse’s code of paranoia is misleading.

“Morris is very good at manipulating the figures,” said Commissioner Rick Currie. “Sadly, some of them (property taxes) will go up, but some of them are going to go down.”

Reduced county revenue without reduced county spending, as well as a slump in property values, will translate into higher property taxes, Morse said.

“As they (the commissioners) increase the budget and then spread the revenue back to the tax base, it will result in a tax increase,” he said.

Because county revenue sources like permit licensing are down significantly, more government services are now funded with property taxes, Morse said.

For fiscal year 2007, for instance, property taxes only funded 42.1 percent of the county budget, stated in the FY 2010-11 budget report. But property taxes made up 52.7 percent of the $73 million budget the commissioners passed on Sept. 1, Morse said.

If the county commissioners made more budget cuts, he believes, they could keep up with revenue loss and not lean so much on taxpayers.

“If you hold the same budgetary amount, the burden on taxpayers goes up,” he said.

He pointed out the commissioners made some budget increases this year, like bumping up Sheriff’s Department funding $900,000 to $19.6 million.

“There’s been a huge decrease in revenue,” Morse said. “But there have been no associated cuts in budgets or expenditures.”

Combine that with the county’s declining property values, Morse said, and that means higher property taxes.

The county’s net taxable market value has fallen from $14.7 billion in 2007 to $12.9 billion in fiscal year 2011, the budget report states.

The property tax levy in those years increased from .18 percent to .29 percent.

For the new fiscal year, the tax rate is 17 percent higher per $100,000 of valuation, Morse cited from the budget report.

“Even though the county commissioners said, ‘We didn’t take our 3 percent, which means we could have taxed you more,’ the effect is still going to be 17 percent tax increase on people,” Morse said.

What Morse says is technically true, said David McDowell, county finance director.

It is possible that some property taxes will go up, McDowell said.

It all depends on the correlation between an individual’s property value and the county’s net taxable market value, he said.

“If your value went down greater than the market did, your property taxes will go down,” McDowell said. “If it went up, or didn’t go down as far as the market, your property taxes can go up.”

That can happen every year, he added.

“Even in our best years, even when we had decreasing levy rates,” he said. “Really it depends on what your value does in relation to the overall value.”

There is no direct tie between market value and the amount of property tax collected, he said.

The levy rate is determined by taxes set by individual taxing agencies, calculated with the respective market value for those agencies.

McDowell called the 17 percent tax rate increase relative, as some will see their taxes go down.

“Keep in mind that our market went down over 15 percent,” he said. “So it (the 17 percent change) is a little big significant, but it’s not as significant as it sounds.”

The county is trying to minimize spending, said Commissioner Rick Currie. The recently passed budget is $1.5 million less than the previous fiscal year, he pointed out.

“I wish we could cut more,” Currie said. “But 95 percent of what we do is mandated by state law. If we don’t do an adequate job, the state will step in and do it for us, and charge us for it.”

Dan Green, who is running unopposed for Commissioner Rich Piazza’s district 3 seat in November, said property tax is something he will be looking at as commissioner.

“Ultimately, revenues are based on expenditures,” Green said. “I’m always a fan of spending less, because it means we’ll be taxed less.”

He couldn’t predict what he will cut until he studies a line-item budget, he added.

Jai Nelson, competing with write-in candidate Currie for the district 2 seat, disapproved of how much of the new budget is funded by property taxes.

“These trends cannot be sustained in this economic climate,” she wrote.

She proposes a two-year freeze on property tax based budget increases. Any revenue shortfall could be funded from cash, interest and investments, she suggested.

“It’s time for fresh ideas,” Nelson wrote.

McDowell added that because the county decided against taking any of the 3 percent tax hike, that has raised the foregone balance 50 percent to $3.3 million.

“That’s a true measure of what the entity is doing with their taxing authority,” he said.