Opinion: As council examines tax options, there comes a time to hold the line
By JIM BROOKS
Nelson County Gazette
Monday, Sept. 10, 2012, 10:15 a.m. — The Bardstown City Council will hold a public hearing Tuesday at 6:30 p.m. to gather public input as it considers setting the city tax rates. The council meeting begins immediately after the public hearing at 7 p.m., and first reading of a rate is on the meeting agenda.
But first, the council’s finance committee meets today at 5 p.m. in the city council chambers to discuss the tax rates. The meeting is open to the public.
Last year’s property tax rate was 18.8 cents per hundred dollars of value, which produced $1,486,661 in revenue. The council has the option to adopt a tax rate that will generate approximately the same revenue as last year; this rate is called the “compensating rate,” and for 2013, that rate is 18.70 cents per hundred. While the tax rate is slightly lower than the current one, it produces the same revenue due to an increase in property value assessments, which includes new construction.
State law allows the city council to approve a 2013 rate that will generate 4 percent more in tax revenue than was raised in 2012. The rate of 19.4 cents per hundred will produce that four percent — $1,549,920 — $63,259 more revenue than the 2012 rate.
The council also has the option of setting a rate anywhere between the the compensating rate and the rate that will generate the allowable 4 percent revenue increase.
While the cost per property owner of the full 4 percent increase isn’t huge, the notion of a tax hike a year after the city raised more than $800,000 by modifying the city’s occupational tax may raise eyebrows — even though the majority of individuals who were hit by the occupational tax revenue hike live outside the Bardstown city limits.
At the last council meeting, Mayor Bill Sheckles called a rate hike to generate a 4 percent revenue increase “the least painful one” for most city residents. For the record, the council members have not publicly expressed opinions on the 2013 tax rate.
Mike Abell, the city’s chief financial officer, correctly points out that if the council does not take the 4 percent tax revenue increase this year, it cannot make it up when setting next year’s tax rate. This revenue helps fund fire and police protection, recreation, administration, finance and street department expenses.
A tax rate that raises 4 percent revenue may not be a huge hike on anyone’s city property tax bill. However, I contend there’s far greater value in taking a stance to hold the line on higher taxes and sending a message of responsible stewardship to the citizens of Bardstown. Is it worth the loss of $63,259 in revenue? I think it is.
The council will consider the tax rates at its meeting Tuesday and seeks your input. If you are a city resident and wish to voice your opinion on the tax rate, your opportunity will be at the public hearing, 6:30 p.m. Tuesday, Sept. 11, 2012 at the city council chambers.
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