The Hopkinsville City Council approved the first reading of a 2019 property tax increase. Council member Terry Parker, Ward 7, was not in attendance.
If the second reading is approved in the future, the the rate will raise to 23.9 cents on each $100 of taxable real property and 25.1 cents on each $100 of taxable personal property.
For the 2018 fiscal year, the tax rate on real property was at 23.1 cents on each $100 real property and 25.1 cents on each $100 of personal property.
Hopkinsville Mayor Carter Hendricks said that the increase is required in order for the city to make its budget for 2019. He said that the city will fall around $100,000 short of its budget if the tax is not passed and would likely need to find that money through cuts.
Tom Johnson, Ward 8, asked what the original rates would bring in revenue if it was not raised and why that number would not meet the budget.
“We budgeted $4,710,000,” Hopkinsville Chief Financial Officer Robert Martin said. “If we took the 4% increase in real property and left the personal property tax rate the same, I’d say that we would show a deficit of $5,500 less than was budgeted.”
He added that that number is based on how many people would take a 2% discount on taxes if paid before Oct. 21, or how many residents go delinquent on their tax bill. Martin based those calculations on the number of people who fit those categories in 2018.
“If we took the same rate as last year, 23.1 (cents),” Martin said. “…We would be under budget by $141,000.”
Last year, the city’s budget was $4,600,000.
Hendricks clarified that when the city created the 2019 budget, the 4% tax increase was included. He acknowledged that the city leaders knew that the increase was up to the council.
“We stated that multiple times through the budget process,” Hendricks said. “But we recognize that you (the council) still have a decision to make right now.”
Martin added that the city hasn’t raised the increased the tax rate in 10 years.
“If we did not take the 4% increase, we would be losing the additional money,” Hopkinsville Chief Financial Officer Robert Martin said.
Hendricks said that if the city had taken the 4% tax increase each year for the past five years, it would have brought in roughly enough revenue to pay the city’s inflating pension liability that is due this year.
The council approved the first reading of the budget by a vote of 9-2. Johnson and Jason Bell, Ward 11, voted no.
The council will read the property tax rate ordinance for the second time in two weeks.
In other council business:
* An additional Hopkinsville representative slot to the Hopkinsville-Christian County Airport board was approved. Hendricks said that the need for additional board members is a quorum issue since the board currently only has six members.
REACH Jon Russelburg at 270-887-3241 or firstname.lastname@example.org. Follow him on Twitter @newerajon.