The Independence City Council has voted not to increase its tax rate for the 2025 fiscal year, in spite of concerns around inflation and increased property values throughout the region, worries that manifested in the public comments section of the meeting where the council cast their vote.
The council cast its unanimous vote at a special meeting on Wednesday. The rates are identical to last year’s rates at $0.22 for every $100 of real property valuation and $0.534 for every $100 of personal property valuation. Both of these rates are below the compensating rate. For an explanation of compensating rates and other tax concepts, read LINK nky’s tax explainer below.
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.
How do property taxes work?
“We are once again keeping the tax rate the same,” Mayor Chris Reinersman said.
Reinersman discussed the tax situation in Independence in general just before the vote was cast. Kentucky state law is peculiar in that it requires cities to set their budgets before they set their tax rates, forcing cities to project out how much tax revenue they will bring in. The most recent tax revenue projections, Reinersman said, suggest the city would bring in about $50,000 more than expected expenses.
“That’s a pretty tight window on this $10 million plus budget,” Reinersman said, referring to the overall size of the budget.
Although the tax rate remained the same, property values throughout the region and nation have increased precipitously over the last few years. As a result, even if a rate doesn’t change, residents might still have a higher tax bill because the overall value of their property has increased. In fact, this phenomenon was the subject of recent discussions in Newport.
County property valuation administrators are in charge of determining the fair market value of people’s properties. They release property values for local areas every year, but physical examinations of property in cities in a county are usually done on a rotating basis. Independence’s last PVA examination took place in 2021, and they will release the results of their most recent examinations in 2025.
Kentucky saw housing prices increase about 6% from June of 2023 to June of 2024, according to a July report from the Federal Housing Finance Agency. Prices have risen about 55% in the last five years.
Property valuation administrators don’t set tax rates; that’s the city’s job. Reinersman readily admitted that the city would bring in more tax revenue, even though the rates didn’t change. But he argued that the city had been under the same inflationary pressures as society writ large, and the increased revenue was necessary to provide expanded public services.
“We’ve increased law enforcement, the single largest service we provide the city,” Reinersman said. “Our road maintenance projects–as we look at our road plans year to year, we’re staying further ahead than we have over these last several years; we’ve stayed ahead of that, and we’ve increased events and other things.”
He added that he understood people’s frustrations with the recent year’s cost of living increases on top of a potentially higher tax bill. Still, he defended the proposed rate freeze.
“It’s the same frustration I feel when I go to the grocery store or a variety of other places,” Reinersman said. “Costs have gone up, and there’s a variety of reasons behind that, but the end of the day, we are healthy.”
Council members were broadly in agreement with this.
One resident, Don Lambert, spoke at the meeting and asked the council to consider lowering taxes in the face of increased property values.
Things escalated from there.
“You said that there was going to be increase in revenue based on a flat rate this year of 22 cents per $100,” Lambert said. “I propose that you don’t need that increase. You had that amount of excess in the budget last year. It may be tight. You can do it. If you did it last year, you can do it again. Don’t put the burden on the shoulders of the homeowners.”
Reinersman asked if Lambert had an alternative for making up the increased city expenses.
“I just told you,” Lambert said, clearly upset. “Were you not listening?”
“You said keep the revenue the same by setting the tax rate to offset the increase evaluation, so we would bring in the same revenue,” Reinersman replied “I’m not sure how we cover the additional. Our expenses are not nearly the same as they were last year.”
“That’s why you’re here, to figure it out,” Lambert said. “I don’t have the inside picture of what you have, but I know that there’s ways to manage revenue, and there are ways to cut expenses, and you guys can manage them.”
Reinersman said the city’s finances were public record.
“I didn’t ask you to defend yourself, sir,” Lambert said.
“No, you accused me and walked away,” Reinersman said.
“I didn’t accuse you of anything,” Lambert said. “I said, ‘You know how to manage it.’ Are you not listening.”
At this point, councilmember Tom Brinker asked the police officer in the chambers to move Lambert away from the dais. Lambert took his seat.
Brinker and the other council members affirmed the mayor’s points.
Brinker pitched a hypothetical scenario of a large manhunt, like the one that’s been going on this month in Laurel County, which could incur a large number of police overtime in Independence. In such a situation, the extra $50,000 projected to come in “would be wiped out in heart beat.”
“It would be wiped out in a bad winter,” councilmember Carol Franzen said.
“There are scenarios that you can’t prepare for,” Brinker said. “You can never tell what’s going to happen, and you get to be ready.”
Following more discussion, the council then cast their unanimous vote in favor of keeping the rates unchanged.
The Independence City Council’s next meeting is set for Oct. 7 at 7 p.m. at the Independence City Building on Madison Pike.