|Property owners in Fort Thomas will see a 5.34 percent decrease in property taxes this year. (FTM file)|
By Robin Gee, City Council Beat Editor
Fort Thomas property owners will see a 5.34 percent decrease in their property tax rate this year. The current (2017) property tax rate is .412 cents per $100 of assessed value of property. The new rate for 2018 will be .390 cents per $100 of assessed value.
The value of the average single-family home went up from almost $216,000 last year to $236,997 this year. With the new tax rate, that average home would see a decrease of $52.14.
Properties are assessed annually by the Campbell County Property Valuation Administration (PVA). Many factors, including location, land and size, go into this assessment, but the goal is to arrive at the fair market value of the property in question. This year, properties in Fort Thomas went up in valuation.
In real dollars, however, whether you will pay more or less property taxes depends on whether your home was assessed this year. About 60 percent of Fort Thomas properties were reassessed this year, and, because their values went up, owners could see an increase even though the rate has gone down. For the remaining 40 percent who were not reassessed, and for those whose assessments did not increase by much, taxes will go down due to the lower tax rate, according to Director of Finance Joe Ewald.
The new tax rate includes the compensating rate plus a four percent city revenue increase, the maximum allowed by law. This amount has been included in the city’s adopted budget for 2018.
In a five-to-one vote, council passed the new rate.
Concerns continue over taking the full four percent
As in recent years past, Council Member Lisa Kelly voted “no” in protest against the practice of taking the full four percent allowed by law. Although he voted in favor of the tax rate, Council Member Ken Bowman also expressed concern about taking the full amount of increase each year.
Mayor Eric Haas said uncertainty makes budgeting difficult and taking the full amount the prudent choice for now. The uncertainty is caused by the two factors that have the largest impact on the city budget — health care costs and pensions.
"We’ve looked at what not taking the full four percent compensating rate would do to the city…If we can get a handle on those two costs at some point in the future, then we could forecast five or 10 years out…then we could sit back and say, 'okay, we did a 10-year budget and could plan tax increases appropriately.'"
Changes in pensions still on the table in Frankfort
The 2018 city budget takes into consideration pension payments based on a phase-in plan set by the state to cover state and municipal pension costs.
According to Ewald, a 12 percent increase to apply toward pensions, the amount allowable under the phase-in, equates to about $180,000 a year for the city. This amount eats up much of the revenue generated through the four percent compensating tax rate. Next year, the city can expect the same, he said.
"With regard to the pensions, it is still a legislative agenda item for the Kentucky League of Cities to push for separation [of state and municipal pension systems]…They talked about that at the last session, and it got dismissed… Obviously, the pension issue hasn’t gone away," said City Administrator Ron Dill.
"For our purposes, being a municipality and certainly looking at the two pension systems side by side, there’s still a lot of benefit to us for having a separation for CERS, so we will continue to support that. We will be talking with our legislators, and we would advise everyone else to do the same," he said.
City exploring ways to control health insurance costs
In his report to council on city activities, Dill spoke on the challenges and efforts that have been made to control costs for health insurance for city employees.
"We’ve experienced significant increases over the last five years. We’ve parred down the plan over the last five years; we’ve added copay from employees over the last five years; we’ve had to change carriers to maintain costs, three different carriers in four years — so we’ve run out of a lot of options."
While still in the exploratory stage, Dill said city staff is now looking into the idea of self-funding health insurance. He and Ewald have been doing extensive research on the topic, including visiting and speaking with neighboring communities that have moved to the self-funded model, he said.
Next steps include meeting with employee work groups through city unions to discuss the topic. "We really made a promise to them that we would look at every possibility, because they are feeling the affects of cutting the plan and having to move to new carriers every year," said Dill.
"This is a departure in a pretty large sense from where we’ve been from fully funded, but we’re getting more and more comfortable with the idea of the cost savings that it could generate and the idea that in the longer term looking at…something that is a little more manageable in the budget," he said.
"We have examples of neighboring communities that have done very well with self-funding. It always depends on your group, your usage but at least you have some control over how your costs and your expenditures are being generated."
He said another advantage to self-funding is it would allow the city to review usage and work on ways to control costs based on findings with all involved.
The city will need to hire a consulting team to help with a plan. Dill said he will report back to city council after meeting soon with employee groups.