Alexandria holds public input session for proposed tax rate change

Haley Parnell
Haley Parnell
Haley is a reporter for LINK nky. Email her at [email protected]

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The city of Alexandria held a public hearing Thursday to receive input for the 2023 ad valorem tax rate.

An ad valorem tax is a tax based on the assessed value of an item, such as real estate or personal property. The proposed rate is $0.14 per $100 of valuation, down from the 2022 rate of $0.172 per $100, with a compensating rate of $0.135.

There are two parts that make up the tax. There’s the tax rate and the property valuation that the Campbell County Property Valuation Administration office sets.

“Each year, the property valuation administrator in every county will send out a report to different cities in the county,” Alexandria City Administrator David Plummer said. “Totaling the amount of valuation in your community and our valuation in Alexandria exponentially increased from last year to this year by a large margin.”

The 2022 taxable real estate assessment after exemption in the city was $956,470,942. The 2023 taxable real estate assessment after the exemption is $1,246,289,343. This equals about a 23.3% increase in valuation. 

Here’s how the property valuation works: If you have $100,000 worth of valuation made up of commercial and residential properties, with Alexandria’s new proposed tax rate of $0.14 per $100, you’ll pay $140.

How are property valuations determined?

Campbell County Property Valuation Administrator Daniel Braun told LINK nky last year that the county will look at a city and then break it into parts, such as with Fort Thomas, which was evaluated last year. They’ll look at the north end, middle and south end of the city because they are so different. Or if a city has various subdivisions like Alexandria, they’ll look at each separately.

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They then look at the type of house in each area. Is it a single-story or two-story home? Does the house have brick or siding? Then they compare those homes to what the properties around them have sold for.

One thing to note about the valuation process is that the PVA office can only determine your home valuation based on the outside of your home. They are legally not allowed to enter your house, Braun said.

Braun said they look at how long a person has lived in their home and when the home last sold to get an idea of the renovation status inside a home. If someone has lived in their house for 30 years, they assume it hasn’t undergone many renovations. If someone moved into their place within the past five years, they guess the property has had decent upgrades.

The state of Kentucky doesn’t allow cities to heavily tax property, and if they’re going to, it will be subject to recall if it is over 4% of the compensating rate, Plummer said. The compensating tax rate allows a taxing district, as a minimum, the same tax revenue that was produced in the preceding year, according to the Kentucky Department of Revenue. As assessments rise, the tax rate is rolled back so that revenue from existing property remains the same.

Should property values go up, then the compensation rate would go down. If a city goes over a 4% compensating rate, then citizens can file a petition to get a referendum to reduce the tax rate back to what it was.

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The 2022 rate of $0.172 produced a revenue of $1,645,130. The expected revenue from the 2023 $0.14 rate is expected to be $1,709,024. Revenue from new property and personal property is expected to be $35,781.

“We were in a situation where even if we take compensating rate to pull in the same amount of money we took last year, adjusting for inflation and taking that 4%,” Plummer said. “Overall, we’ll probably merit greater property revenue than we did last year by lessening the burden on personal homes.”

Alexandria Mayor Andy Schabell said this is the second consecutive year that the city has lowered its tax rate. The proposed rate was a first reading and, therefore, won’t be voted on until its second reading. No residents spoke at the public hearing.

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