At a public hearing last week, Alexandria City Council proposed changes to this year’s property tax rate in order to avoid gaining more revenue than allowed by law.
Despite the fact that this year’s proposed tax rate is slightly less than last year’s, the city is expected to draw in more revenue. This is attributable to, officials said, property appreciation.
The proposed tax rate was 0.172% per $100 of property valuation. This is a slight decrease from last year’s rate of 0.174% per $100 of property valuation. In spite of this, the city is expected to draw in more revenue—about $1,534,750 for 2022—compared to last year’s figure of roughly $1,529,000.
No members of the public offered comments about the proposed rate at the hearing.
City Attorney Mike Duncan, who prepared the projected tax figures, attributes this increase in revenue to the uncharacteristic rise in property values over the past year.
“Property has appreciated quite a bit in the last year,” Duncan said. “Anybody who’s been trying to buy or sell a house or property knows the values have been going up quite a bit.”
He said he based his calculations on county-wide property value assessments.
That change in property values presented an unexpected problem for the council: Maintaining 2021’s tax rate of 0.174%, which has been in place for several years, would create an increase in tax revenue greater than what is legally allowed from year to year, potentially triggering a recall election. The city needs to charge a tax rate of at least 0.166% per $100 to break even with last year’s tax revenue.
According to Redfin, an independent real-estate brokerage company, housing prices in the United States increased 7.7% between July 2021 and July 2022. Some areas in Kentucky have seen a steep increase in property taxes as a result. According to an April news report from Link NKY, areas such as Fort Thomas, Southgate, Wilder and Woodlawn saw property taxes increase as much as 50%.
Home values for 2022 peaked in May and began slowly declining in June along with the number of homes sold.
The council will vote on whether the city should finalize the rate at their meeting on Sept. 1.