Property-tax rate will drop a little

Property-tax rates in Louisville are going down, but only because property values are going up.

The Louisville Metro Council’s Budget Committee unanimously approved new tax rates yesterday for real estate this fiscal year.

The rate in the urban service district — the boundaries of Louisville before merger — would decline to 49.31 cents for every $100 of assessed property value. Last year’s rate in the district was 49.83 cents.

The new rate will mean a $986 tax bill for the owner of a $200,000 home, a decrease of about $10 from last year.

People living outside the old city limits will see a slight decrease as well, to 12.55 cents from 12.6 cents per $100 of assessed property value. Rates inside the old city are higher to pay for things such as fire protection.

The new rates will go to the full council for a vote next week.

Jane Driskell, metro government’s chief financial officer, told the committee that state law allows tax receipts to grow by only 4 percent in any given year.

Because the total assessed value of property increases each year, it typically requires a lower tax rate to keep receipts from growing no more than 4 percent. The impact on individual tax bills varies based on a property’s assessed value.

Taxes on existing property will bring in $126 million to the city this fiscal year.

“This represents the lowest tax rate since merger,” Driskell said.

Council member Hal Heiner, R-19th District, asked if it is wise to cut property taxes since the Kentucky Court of Appeals ruled Aug. 5 that metro government has for years been underpaying firefighters for their overtime.

A spokeswoman for Mayor Jerry Abramson said at the time that the ruling could cost up to $60 million. Driskell said yesterday that no calculation has been made on how much is at stake.

Besides, Driskell said, keeping the tax rate the same wouldn’t add that much to city coffers.

“It’s less than a $1 million impact,” Driskell said.

The city could face a challenge from taxpayers if it wanted to increase tax revenue by more than 4 percent.

Several council members said they suspect that other cities around the state keep their rates the same year after year.

“If we did that, we would be in violation” of state law, Driskell said.

Reporter Dan Klepal can be reached at (502) 582-4475.

The Courier-Journal

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USGBC - U.S. Green Building Council

HUD - U.S. Department of Housing and Urban Development

NAR - National Association of REALTOR

RealtyTrac

FHFA - Federal Housing Finance Agency

Freddie Mac

MBA - Mortgage Bankers Association