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Tuesday, September 8, 2015

Fort Thomas to Discuss Property Tax Rate

Councilman John Muller is the Chairman of the Finance Committee.  FTM file. 
Legal notices for new property tax rates for the City of Fort Thomas and Fort Thomas Independent Schools were advertised over the past month, after being discussed in committee by the city finance committee and school board, respectively.

A public hearing occurred last week for the Fort Thomas Schools and there will be one tonight in the City Council Chambers immediately preceding the council meeting.

Only one community member spoke about a concern with the increase in local taxes in front of the Fort Thomas School Board on Thursday. The new rate was set at 103.6, which is an increase of 3.1 cents per $100 of assessed property value. The rate last year was 100.5, which works out to compensating rate plus four percent.
The proposed tax rate for the City of Fort Thomas is $.390/$100, which is also the compensating rate plus four percent, up from $.378/$100 in 2014.

The proposed surplus for next year is $10,462,009.

Existing law generally provides for the possibility of a voter recall if the proposed tax rate generates 4 percent more revenue than was generated the prior year, which is another way to say compensating rate plus four percent.

Councilman, Adam Meier, indicated during a previous council meeting while discussing the budget that he preferred a budget neutral approach along with a tax rate to reflect that need, instead of an automatic rate increase plus four percent.

"I understand the purpose for running a surplus but feel through prudent budgets and management in the past, the City is now in a position to pass a revenue neutral budget and use current reserves for any large unanticipated expenditures that may arise," he said.

Adam Meier. FTM file. 
Property taxes are a significant revenue source for Kentucky’s cities. The Kentucky Constitution and state law requires cities to annually tax all real and personal property.

In the 2013 census, Fort Thomas' population was 16,225, which puts the city in the highest category for assessed property values established by the Kentucky Constitution.

Compensating rates were developed to allow cities and counties to maintain tax revenues at a constant level when the tax base goes up or down. If the assessed value of all taxable property goes up, the compensating tax rate goes down. If the tax base drops, the rate is adjusted upwards.

Former City Administrator, Don Martin previously broke down the percentage Fort Thomas residents paid the city versus the schools.

“The school system establishes its tax rate separate from the city. The city, through its Board of Council, establishes its tax rate,”  said Martin. “The school contracts with the city to send bills and collect property taxes on behalf of the school. Because the property owners are writing the checks to the city, they assume it is all ‘city taxes’ when in fact, the ‘city tax’ is about 30 percent of the total bill.”

Interim City Administrator, Ron Dill, who, at 28 years is the longest tenured employee of the city, said that he could not recall the last time the city did not set the tax rate at compensating percentage plus four percent, which is the largest allowable by law.

The existing method for calculating local government property tax rates was primarily established by House Bill 44, enacted during 1979.  The original provisions have since been amended, resulting in a calculation process that involves several steps and the determination of several different “benchmark” tax rates.

City of Fort Thomas Finance Officer, Joe Ewald, said that while the city does keep historical data on tax rates,

House Bill 44 was enacted in response to high inflation rates that were causing property values to increase quickly, which dramatically increased property taxes paid by some property owners. The bill established specific revenue benchmarks at which a public hearing will be required, and a higher level at which the possibility of voter recall will be triggered.

1 comment:

  1. I hope the increase goes towards fixing some of the other streets in Fort Thomas. The side streets and roads such as Waterworks are in dire need of repair.