Fort Wright City Council approves first reading on annual tax rate; property values have increased
By Patricia A. Scheyer
September 13, 2023
Fort Wright City Council voted on their annual tax rate last week, accepting the recommendation of the financial committee.
The tax rate for the 2022-2023 fiscal year was .248 cents per $100 of assessed value for real property, and the rate for personal property that year was .380 cents per $100 of assessed value.
“I want to spend a few seconds with some background and some context on this on how we got to where we are,” said Ft Wright Mayor Dave Hatter. “Every year we try to take a look at the audited expenses and revenues, plug them into this spreadsheet and then project out what do we think will happen over the next ten years. Obviously, it is impossible to predict what’s going to happen in the next ten years, but the main thing we are trying to get a handle on here is how fast the revenues are increasing or decreasing versus how fast expenses are increasing, because they never decrease.”
He said he is happy to say they have substantial reserves, and are long term debt free, and the financial picture is very good. Hatter did say that recently their expenses have been increasing much faster than the revenues.
“The .248 rate is the lowest rate in the last ten years,” Hatter said. “It’s been fairly static, we’ve continued to try and reduce it, but also I want to be really clear to people, we’ve seen some massive increases in expenses. Things like payroll expense, things like our street program expense. But that’s something we need to take a hard look at.”
A slide showed the tax rates for the last 20 years, showing a slow decrease.
He said the good news is that the city is showing growth, more businesses moving to town, more construction, and according to the PVA there is $632 million worth of property in the city of Ft Wright. The base property values have slowly increased over the last 5 years.
There was a 4.37 percent increase in property values over last year. He said that trend should continue and it is a positive trend.
“As a person whose property value has gone up, you are going to pay more in taxes,” said Hatter.”But that also means more revenue for the city, more of the money that makes it possible to get the roads fixed, and police show up when you call and the ambulance shows up.”
Hatter explained that according to state law, they cannot raise the property taxes more that 4 percent without it being subject to referendum and recall by the voters. They calculate a compensating rate, which is a rate speculated to generate the same amount of revenue as the year before.
If they take the compensating rate plus 4, it would generate about 122,000 more than last year. He said that one police officer plus his expenses, would also equal about $122,000, so that increase in taxes will not go very far.
“I think it is so important for people at home, who are paying these taxes to understand these things,” he said.
He said the city has to take into consideration how much things cost in the city. He said new fire equipment is very expensive. In addition, it costs $600,000 to $800,000 for fixing roads each year, Hatter said.
“The amount of new money that generates, despite the fact that it might feel very expensive to you, doesn’t exactly fill our coffers full of loot,” he stated. “So, that being said, the real property rate for this year, after a lot of conversation with Bernie (Wessels) and Jay (Weber), the members of the finance committee, what we’d like to recommend to council and have a first reading tonight is just to go ahead and leave the rate the same as last year.”
He said the real property rate is proposed at .248 per $100 of assessed value, the same as last year. That will generate an extra $65,570.22 for the city.
“We are trying to do projections ourselves,” said Wessels. “As the mayor referred to, there are a few things we still have to do. There are a few things left to tweak, but I think we feel comfortable with the recommendation. And I can’t thank the mayor enough for his spreadsheets, and Jill (Cain Bailey), too.”
The tangible or personal property has dropped, and Hatter said they asked the PVA office why the value on tangible property dropped from $41 million to $34 million since 2019. Last year to this year it dropped 11 percent. He said the person from the PVA office said they didn’t know why it dropped, they said they got their information from the state and passed the information on.
“It is a disturbing trend when you see $7 million in taxable value just go off the books, because this is the money that makes the city possible,” said Hatter. “We discussed this with our accountant, and he threw out some ideas, some of it could be from Christ Hospital becoming tax exempt, and some of that value going away from there, it could be depreciation, or people could be not reporting things they used to report.”
Last year the tax rate was .380 per $100 of assessed value, and should have yielded 146,000. The compensating rate is .446, which would produce $152,516.47, an increase of $6,407.47. Due to the decrease in property value, so after discussing the matter, they thought it would offset the loss, so the finance committee proposed tax rate would increase to .446.
This is a first reading, and the second reading will set the rate in October. Council voted to approve the rates.
Link to original article: https://nkytribune.com/2023/09/fort-wright-city-council-approves-first-reading-on-annual-tax-rate-property-values-have-increased/