The rate proposed is 39 cents per $100 of property, up from 37.8 cents per $100 last year. That rate is the compensating rate plus 4 percent, which is the maximum rate allowable by law without being subject to voter recall.
The tax increase will bring in an additional $218,996 in anticipated revenue, for the proposed surplus for next year is $10,462,009. The estimated budget to run the city next year is $11,016,783.
Councilman Adam Meier, who was absent at the meeting due to a medical issue, indicated during a previous council meeting 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.
Meier sent a memo, which was read for the record.
"As you may recall during our discussion of the budget, I proposed a passing a budget-neutral budget instead of the budget-positive budget that included $76,460 as reserve funds. The reason is that I feel the prudent fiscal management of the past has put us on sound financial footing, and given us a satisfactory reserve to utilize a budget-neutral approach to computing our tax rates... I do not see the need at this time to pass the maximum tax rate allowed by law."
Meier proposed an alternate tax rate of 37.8 cents per $100, which would be a 1.3% increase over the current rate or 2.1% increase over the compensating rate.
"This would produce the revenue needed to cover our budget, less the $76,460 that was allocated as reserve amounts," he stated.
Councilwoman Lisa Kelly agreed with Meier's sentiment. “It might be prudent to look into a budget neutral. It seems likes we have a pretty good surplus as is,” she said.
Mayor Eric Haas said that looking at these budgets as a businessman and from a government perspective are not one in the same.
"I had brought this up when I first got on council. If we didn’t have House Bill 44, we might be able to run the budgets close to neutral but I had to learn that you can't analyze these budgets like you would if you were running a business."
In 1979 House Bill 44 was passed to cap property taxes at 4%.
Councilman John Muller, who believes the city should raise the property taxes the full amount, said he thought it may be time to discuss revamping House Bill 44. "Maybe we should work with our state delegation on HB44. If it came into existence in 1979, perhaps it's time to look at altering that methodology so we could alter our methodology."
Councilman Roger Peterman agreed that the proposed tax increase was the direction the city needed to continue. They both mentioned the $76,000 that Meier's proposed budget would save as cutting the budget too close to comfort.
“Kentucky is a very low property tax state. Property taxes are, in my view, are the fairest and most reliable types of taxes. So if we look at the budget and decide we don't need the revenue, I would suggest we reduce another tax at that point," said Peterman. “On budgeting the argument is a difficult one to answer because it’s just based on projections. Sometimes these sources of revenue are unpredictable. We haven’t experienced that unpredictability recently, but we could have a $76,000 overrun easily. A bad winter for example. To budget to the dollar is not what we should do conceptually. We could get to the point that we have sufficient reserves so that we can take more risk and budget more aggressively."
|Meier, Peterman, Muller, Kelly and Ken Bowman, reading their oaths before taking office in 2014. FTM file.|
Councilman Jeff Bezold also agreed that taking the full compensating rate plus four percent was the correct path.
"The research that has been done by staff recommends that we have a 25% reserve and we don't have that right now. If we get to 25% you can potentially discuss having a budget-neutral conversation. Until then, I'd say we'd stay the course."
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.
|Interim City Administrator, Ron Dill. FTM file.|
|27 Year Average Tax Rate|
|City of Fort Thomas|
|Year||Real/Personal Property Rate Per $100 Value||Percent Increase or Decrease||Taxes Paid on home valued at $208,985.85|
|27 Year Average||$0.3245||0.5350%||$678.17|