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To many, August signifies the end of summer, the start of a new school year or the last full month without football.
However, to a subset of the population, namely journalists and those serving on or with taxing entities, it signifies the beginning of tax season — when cities, counties and taxing districts set their property tax rates for the following year.
Writing about taxes isn’t particularly fun, imposing them on the public probably isn’t either and you might even be tempted to skip over reading the stories about taxes, but we urge you not to do so.
While there usually isn’t a large public outcry when it comes to tax rates — that is unless they are raised significantly — tax rates are some of the most important things we cover because they affect a large percentage of the population.
Taxes can also be extremely confusing — and not just to you, but to the very boards and commissions that are setting the rates.
Each year, the state assists in providing calculations to taxing entities giving them choices of rates to enact.
The most common of those calculations are the compensating rate and the 4 percent revenue increase.
The compensating rate would provide approximately the same amount of revenue as the previous year. However, the compensating rate is not the same as choosing the same rate as last year. If property assessments stayed exactly stagnate, then yes, the compensating rate would be the same.
However, take this year for instance. Property assessments fell a small percentage for both the city and the county. Because the assessment dropped, the compensating rate would be higher than last year’s rate — it would take a higher tax rate to produce the same revenue.
The 4 percent revenue increase can be tricky to understand as well. Many boards believe it to be a 4 percent rate increase, but this is simply not the case.
Kentucky Revised Statute 132.027 states that city and urban-county government can approve a tax rate that would produce up to 4 percent more revenue than the compensating rate without it being subject to recall.
Thus far, the city and county governments have each decided to keep the tax rates as they were last year, and in some cases the last several years. It’s safe to say it’s been several years since either the city or county has raised its property taxes.
The school board, which collects the greatest percentage of taxes in the county, has yet to decide the rate it will approve this year, which is great for you — the taxpayer.
A tax hearing is set for next Thursday, Aug. 29, at 6:30 p.m. for the sole purpose of hearing from the public. So we say, go. Attend that hearing and let the board members know what you think.
We would also encourage you to attend the city’s tax hearing on Sept. 3 at 4:30 p.m. as well as the next Fiscal Court meeting on Sept. 4 at 9 a.m. Let these entities know what you think about their decisions.
Whether they believe it or not, it’s your money. Have a voice in the discussion.