For the first time since 2009, Dayton residents will see a dramatic drop in their property tax rate.
The rate for the 2024-2025 fiscal year will drop by 15%, City administrator Jay Fossett announced at Tuesday’s city council meeting during the first reading of the city’s 2024-25 tax ordinance.
“This is a big deal, and it’s a great thing for the residents,” Fossett said. “Basically, if you have a $100,000 house, you were paying $476 last year. This year, you’re paying $399 in city taxes. That’s a $77 reduction in tax.”
He said that by Kentucky law, cities must apply a compensating tax rate, which means a city can only bring in the same amount of tax money on real property as it did the previous year plus a four percent increase to cover increased costs due to inflation.
The assessed value of city properties went up 30%. Even with accounting for an allowed 4% increase, the city has to reduce the property tax rate to keep within the compensating rate, Fossett said.
“We’ve had to reduce our tax rate by 15% because we’ve had a reassessment of our properties,” Fossett said. “We’ve had new development that’s been occurring, and we’ve rehabbed some of our existing properties in the city.”
He noted that new development is not included in the assessment in its first year. Therefore, new development underway in the city this year will not be reflected until next year.
“That’s what we’ve been working towards — to get property values up,” council member Joe Neary said. “Because when your property value goes up, your equity goes up, and someday, you or your heirs are going to be selling that house. This is great that this is going in this direction.”
According to Dayton Mayor Ben Baker, this tax rate reduction is the result of three things: an increase in new development in the city, a current trend of rehabbing and reselling properties for higher prices than they were previously assessed and finally, the Campbell County Property Valuation Assessment Office’s reassessment of Dayton real estate last year.
He added that the city’s conservative fiscal approach and prudent spending, as well as increased efforts to collect occupational license fees, past due taxes, and civil fines, has allowed it to balance its budget without increasing property taxes.
“We’ve been able to maintain and improve the quality of life in our community by reducing property taxes, increasing code enforcement activities, and finding creative ways to fund important infrastructure projects in our city,” Baker said.
City council will hear a second reading of the tax ordinance at its next meeting on Sept. 10.