Cov­ing­ton to lower property tax rate

The Covington News - - FRONT PAGE - GABRIEL KHOULI

Edi­tor’s note: The ar­ti­cle “City joins rail case, OKs budget” in Wed­nes­day’s ar­ti­cle con­tained a re­porter’s er­ror re­gard­ing the mill­age rate, and this ar­ti­cle was writ­ten, in part, to cor­rect that er­ror and clar­ify the sit­u­a­tion.

Some Cov­ing­ton home­own­ers will be get­ting a break on their city property taxes.

The Cov­ing­ton City Coun­cil reached an in­for­mal con­sen­sus dur­ing a budget work ses­sion ear­lier this year to lower the city’s mill­age rate in 2014.

The city’s 2014 tax digest – the value of all land, build­ings, mo­bile homes, ve­hi­cles and in­dus­trial equip­ment – hasn’t been fi­nal­ized yet, so the size of the tax rate re­duc­tion hasn’t yet been de­ter­mined, said City Man­ager Leigh Anne Knight.

How­ever, in the $126.4 mil­lion budget ap­proved this past week for the 2014-15 budget year, the city pro­jected re­duc­ing the cur­rent 8.208 mill­age rate by half a mil (0.5), which would be 7.708.

For a home val­ued at $150,000 that ex­pe­ri­enced no change in value from 2013, the mill­age rate re­duc­tion would re­duce city taxes by $30 ($492.48 re­duced to $462.48). Some home­own­ers may not ex­pe­ri­ence a sav­ings if their property val­ues in­creased in 2014.

Based on that half a mil re­duc­tion, the city is pro­ject­ing to col­lect $4.089 mil­lion in property taxes. The city al­ways un­der bud­gets tax col­lec­tions, Knight said, just in case tax pay­ments were not to come in as ex­pected.

For ex­am­ple, in the 2012-13 budget year, the city bud­geted to col­lect $4.1 mil­lion in property tax rev­enue, but ac­tual col­lec­tions were $4.51 mil­lion.

Knight said the New­ton County Tax As­ses­sor’s Of­fice, the county depart­ment that de­ter­mines property val­ues, told her the city was not ex­pected to see an over­all de­cline in its digest, but Knight said she wasn’t told the city would see an in­crease ei­ther.

Coun­cil mem­bers said they wanted to give back to home­own­ers as the eco­nomic re­cov­ery has been slow.

“I be­lieve that it’s time to give some back to the property own­ers in the city for we have all suf­fered through the past sev­eral years,” Councilman Chris Smith said in an email. “As you may re­mem­ber I rec­om­mended this last year, but it didn’t work out. This year the coun­cil talked about it, and it’s what we re­ally wanted to see done.”

Last year, Smith raised the idea of a half a mil tax break, but the coun­cil ul­ti­mately voted to in­vest the money, which would have been around $244,000, into the po­lice depart­ment.

Coun­cil­woman Janet Good­man said she wasn’t sure the small sav­ings would make a dif­fer­ence to cit­i­zens, but she said the coun­cil wanted to do what it could.

“We just wanted to try to give the cit­i­zens some­thing to hold on to to let them know we do have our cit­i­zens at heart. We do know things are low,” Good­man said.

Property tax rev­enue only ac­counts for 3.2 per­cent of the city’s budget.

The vast ma­jor­ity of the city’s pro­jected $126.96 mil­lion in rev­enue comes from its elec­tric sys­tem, $50.19 mil­lion ($42.36 mil­lion in ex­penses), and its nat­u­ral gas sys­tem, $15.91 mil­lion ($11.98 mil­lion in ex­penses). The city has kept is property tax rates low for years and used rev­enue from its elec­tric and gas op­er­a­tions to fund some other ar­eas of the city.

The $11.76 mil­lion the city projects to col­lect in elec­tric and gas rev­enues above ex­penses in the 201415 budget year is used to cover other costs, such as pub­lic safety, roads and in­ter­nal city de­part­ments.

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