Does my neighbor’s tax exemption cause my property taxes to increase?

Yes, to some degree.  See discussion on fund rate in “...point to reduced tax rates but my taxes continue to go up.”

 

The restricted fund rates cannot and will not increase your neighbor’s taxes because the rate is set at a fixed percentage of their EAV.  The non restricted fund rates will change based on the EAV being divided by the that fund’s levy.  The levy for Debt Service does not change based upon anything other than what is owed on the debt.  Therefore, the debt owed will be paid by those that are still paying taxes.  The exemption reduces the total EAV.  It does not reduce the debt.  It is then paid out of the remaining EAV.  

 

The good news is that the total of the unrestricted funds are much smaller than the total of the restricted funds.  The bad news is that the Debt Service Fund is unrestricted and can be subject to a Working Cash Bond Issue at the whims of the taxing body.