The City of Covington is expected to approve a reduction in its property tax rate.
On Tuesday night, the first of two necessary public readings of the tax ordinance was presented to the commission for consideration.
City Manager Ken Smith is recommending a property tax rate of 0.271, a reduction from last year’s rate of 0.327.
Smith also recommended a personal property tax rate of 0.328, down from last year’s 0.349. (Property taxes apply to residential and commercial properties while personal property taxes apply to possessions such as vehicles and boats).
Tax bills for Covington property owners are to be distributed next month, so approval of the proposed rates is expected at the next city commission meeting.
The tax reduction discussion follows a significant increase in the assessed value of many properties in Covington and across the region.
“Our assessment in Covington has dramatically increased over the past year,” City Manager Ken Smith said.
Mayor Joe Meyer noted that because of the higher assessment of many properties in the city, some taxpayers will pay more than last year, but will do so at a lower rate, if the commission approves the tax rates.
“There are those who will be paying more because their assessment has gone up, but they will not be paying more than they would have under the previous tax rate,” Meyer said. “There will be others, some lucky people, who actually get absolute tax reductions because their property was either not reassessed or reassessed in such a way that they still wind up with a real reduction in the amount that they pay.”
Covington’s property tax rate has decreased substantially since 1975 when it was around 0.740.
In comparison to 19 other Kenton County cities, Covington would be in the bottom five for city property tax rate. This is counter to what some city officials believe is the narrative surrounding Covington and its tax rates.
“I think a lot of times it’s assumed that folks in Covington are paying a much higher property tax than other cities,” Ken Smith said.
Smith projects that the new rates would theoretically increase overall tax revenue for the city. According to Smith, new property constructed within the city would not be subject to the compensating tax rate. If the city reduces the rate due to a rise in assessment, the City would gain tax revenue for the new buildings being constructed.
“It’s safe to say the reason that we’re getting additional revenue is because our city is growing, having more homes built here, and having new businesses come here,” City Commissioner Ron Washington said.
Mayor Joe Meyer called the potential rate reduction a “unique opportunity” and noted that it’s “always a good thing to be on the right side of a tax cut issue.”
