Some Kentucky counties continue to raise property tax rates even as home values drop and unemployment shows little signs of improving.
For example officials in Christian County recently voted to raise property taxes by around 6.75%.
Property tax increases of this magnitude are not sitting well with Kentucky voters.
When you dig deeper into the fine print of these tax increases it becomes more obvious that Kentucky counties aren’t pulling these increases out of the air. Many are using the provisions of a 1979 law called HB44 to ensure that they receive the same amount of tax revenue that they brought in the previous year – even has home values decline.
That allows Kentucky counties to continue with business as usual and put off the cuts that businesses and individuals need to make in their spending during the economic downturn.
Now HB44 is coming under fire as taxpayers and lawmakers ask whether the true intent of this law has been followed.
HB44 limits to 4% per year the overall revenue growth from taxes that can be levied on real property without putting the increase out to a public vote. That sounds good on the surface, but in reality it appears that some local governments are pushing the provisions of this law to its limits.
Some of the items being questioned include the ability for counties to use a compensating rate to ensure that local taxing district can never take in less than it did the year before. When a local government uses the higher compensating rate it is required to advertise the rates but is not required to hold a public hearing.
As a result, what a growing number of Kentucky property taxpayers are experiencing is a higher property tax bill, even as home values fall.
And more importantly, they are seeing local governments that want to exempt themselves from the pain of cost cutting measures that all other organizations and individuals have to deal with.
Even when the debate on HB44 comes to an end, Kentucky is definitely one of those states where you need to make sure your assessed home value is accurate
