Property tax rates are increasing in Fort Wright in 2023.
A public hearing was held on the property tax rates at a September Fort Wright City Council Meeting. No citizens shared an opinion on the proposed tax rates for the 2023 fiscal year.
Still, Mayor Dave Hatter explained the calculations that lead to this year’s proposal, as well as the historical tax data that puts these rates in context. His report described where Fort Wright stands financially and what its future may look like.
Fort Wright is long-term debt free, has few liabilities, and substantial financial reserves. It’s these financial reserves that have allowed Fort Wright to respond to emergency situations like the water undermining the sidewalk on George Huser Drive, Hatter said. City council was able to approve pulling $125,000 from their reserves to address this issue.
The personal property tax rate will also increase, but per city staff, this rate will only affect businesses not residents.
All of this has added up to Fort Wright’s most recent financial audit declaring them relatively financially healthy.
Hatter did share one cause for apprehension, though.
“We do have concerns, though, because our expenses are increasing much more rapidly than our revenues,” he said.
Data from the past years’ financial audits confirm this.
From 2009 to 2022, the city’s revenue and expenses have both increased. This can be attributed to market fluctuations, inflation, and city growth, among other factors, Hatter said. However, from the start to end of this 13-year time frame, city expenses have increased at a rate of 65.09%, while total city revenue has increased at a rate of 59.29%. This is a difference of around 6%.
Recent increases in expenses can be attributed to payroll costs and the street program.
“We had the city engineer come in last last Council meeting and he basically said they’re seeing like a 41% increase in the cost of rebuilding the streets, based on the program that we’ve been following, which is ideally a 20 year cycle for the entire city,” Hatter said. “And I think it’s been pretty successful.”
This is not to say that Fort Wright is in any kind of financial crisis.
“The fiscal picture is still extremely good,” Hatter said.
Hatter pivoted to explaining this year’s proposed tax rates for both real estate and personal property. The proposed real estate tax rate, which is the same as last year and is the lowest property taxes have been in 10 years, is 0.248.
The personal property tax rate is what the city is raising. Last year’s rate was 0.38 and the compensating rate calculated for this year is 0.446. The compensating rate plus 4% is generally the recommendation that governments take, according to the Fort Wright finance committee, which is what City Council approved.
“The vast majority of Fort Wright residents pay their taxes in full and on time, but even then, taxes only make up part of the city’s revenue. So even though taxes only make up part of the city’s revenue. They are only a small part of the issue.
Still, Hatter said he realizes that the property tax issue is what concerns most Fort Wright citizens, so he explained how any property tax staying the same or raising would affect a property owner.
“If your property values went up, you’re going to pay more taxes,” Hatter said. But Hatter also said that it’s a good sign that property values are going up in the city.
Hatter and the financial committee said that they intend to continue to work to understand these numbers in order to best serve Fort Wright.
“We [want] to continue to provide the best possible services we can things like police, fire, ambulance routes, etc. So that people are safe and secure at the least possible expense,” Hatter said.
The second reading of this tax rate will be conducted at the October city council meeting.