Correction: A previous version of this story said that Erlanger was raising tax rates instead of lowering them. LINK nky regrets the error.
After discovering a $49 million error in a personal property tax assessment, Erlanger City Council voted Tuesday to approve a lower tax rate for the upcoming fiscal year.
That means that, despite the error on the part of the PVA, this will be the 10th consecutive year of tax decreases in Erlanger.
“We believe Erlanger is one of the most affordable and attractive places to live in the region because home ownership continues to become more feasible with falling real property tax rates,” said Mayor Jessica Fette. “We have a lot of exciting things to offer in Erlanger, and a lower tax obligation incentivizes people to live here and contribute positively to our thriving neighborhoods. I’m also very pleased that we will continue to make substantial improvements to the beautiful parks we enjoy.”
The new property tax was set at 0.247, and the tangible tax rate at 0.198.
During a caucus meeting on Aug. 20, the council discovered that the tax rate given based on numbers from a personal property assessment needed to be revised due to the misclassification of inventory from an unnamed business.
How do property taxes work?
Property taxes are broken down into several categories. The first and usually largest chunk of your tax bill is real property tax, sometimes referred to as real estate property tax. This is essentially a tax on everything you own that’s nailed down. For residents, this means houses and other real estate property. For businesses, this means office buildings and other buildings and facilities used to conduct business.
Tangible personal property, on the other hand, is another form of property that isn’t real estate. Depending on where you live, residents may not be taxed on personal property at all–this will vary by jurisdiction.
Depending on where you live, other tax-adjacent fees may apply.
The $49 million error caused the city to take a loss and repay the unnamed business $97,000 in taxes paid by mistake.
“That $49 million has been removed from our 2023 tax rolls and will not be in further tax rolls,” Fette said in the caucus meeting last month. “So what that means is that the tax rate that we set last year was artificially lower than it should’ve been.”
Last year, the city set a tax rate of .198, which decreased from the year prior’s tax rate of .296. Fette said the city is taking the loss, not resetting the comp and tax rate, and getting additional revenue from businesses. The city is also facing an issue with the 2024 Personal Property Assessment’s certified rolls missing businesses, some of which are larger contributors.
The city held a special meeting on Aug. 27 to review the first reading of the tax rates. In tonight’s meeting, the proposed rates were approved after council members noted in last month’s caucus meeting that they were content with not hitting the proposed budget from earlier this year.
The approved tax rates will run for the fiscal year that started July 1, 2024, and will end June 30, 2025. The council will discuss budget amendments at their caucus meeting on Sept. 17.