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Wednesday, September 16, 2015

Public Hearing on Property Taxes Shows Where Council Members Stand

FTM file. 
The Fort Thomas City Council convened for the first of two meetings in September to discuss property tax rates for the city.

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. 
“(The alternative budget saving) $76,000 would be pennies or dollars per household. At the end of the day, I know people don’t like to pay property taxes, but $76,000 is less than 1% of the budget. its not an excessive amount to run a positive budget," said Muller, who is also the Finance Committee Chairman. "To me that's not being fiscally responsible. A neutral budget would start a slope the other way and we would have to start playing catchup."

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. 
The tax rate ordinance was read for the first time at the meeting and will be read again and voted on during the next meeting on September 21.

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
1989 $0.3491 NA $729.57
1990 $0.3152 -9.71% $658.72
1991 $0.3227 2.38% $674.40
1992 $0.2993 -7.25% $625.49
1993 $0.3090 3.24% $645.77
1994 $0.2930 -5.18% $612.33
1995 $0.3020 3.07% $631.14
1996 $0.2940 -2.65% $614.42
1997 $0.3044 3.54% $636.15
1998 $0.3010 -1.12% $629.05
1999 $0.3100 2.99% $647.86
2000 $0.3080 -0.65% $643.68
2001 $0.3310 7.47% $691.74
2002 $0.2950 -10.88% $616.51
2003 $0.2950 0.00% $616.51
2004 $0.3150 6.78% $658.31
2005 $0.3240 2.86% $677.11
2006 $0.3140 -3.09% $656.22
2007 $0.3230 2.87% $675.02
2008 $0.3330 3.10% $695.92
2009 $0.3430 3.00% $716.82
2010 $0.3340 -2.62% $698.01
2011 $0.3470 3.89% $725.18
2012 $0.3600 3.75% $752.35
2013 $0.3720 3.33% $777.43
2014 $0.3780 1.61% $789.97
2015 $0.3900 3.17% $815.04
27 Year Average $0.3245 0.5350% $678.17


  1. So if you don't do the max you are playing catch-up? That sounds like a bit of an exaggeration. Find a compromise. Look for ways to cut spending before hitting residents with a 4% rate. Yes, it might require actually having more committee meetings and actually crunching numbers. Simply voting for the max rate increase is all too easy. It suggests lets get the most we can get so we don't have to figure out ways to curb spending.

    1. Well said! I couldn't agree more.

  2. This council has been a disappointment. Between the inexperience of of the new members and the apathy of old members, we are just going to continue to do the status quo. It's quite apparent that some members have been coached what to say.

    As Steve Jobs once said, THINK!

  3. Im fed up with this political speak. A tax is a tax is a tax. These council members are no better than our congressman and senators, taking orders and talking points from above. DO YOUR JOBS! Zero independent research is taking place. Ft. Thomas City Councilmen and women for too long are running through the motions. While I don't necessarily agree with everything Meyer brings to the table at least you can tell he's doing his homework. I hope we have new blood that will decide to run next time. Is anyone going to challenge Haas?!

  4. Just have the PVA revalue all the property as you have done in the past to get around the tax cap.