Ludlow City Council voted to raise its property tax rates Thursday evening after all three of the rates that had been previously proposed, including one would have kept the rates unchanged, failed to garner either enough votes or even a motion and a second from council.
“I would advise against leaving [this meeting] without any ad valorem property tax rate,” said City Attorney Patrick Grote.
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?
The council had discussed proposed property tax rates at a previous meeting and had come up with three options: Keep the rates the same, do a compensating rate + 4%, which is common default for cities raising properties, or split the difference and do a compensating rate + 2%.
Going into the meeting, the real estate property tax rate was $0.499 per $100 of assessed property value. The personal property tax rate was $1.667 per $100 of assessed property tax value.
The compensating plus + 2% rate would bring the real estate rate up to $0.534 per $100 and the personal property rate up to $1.842 per $100. The compensating plus + 4% rate would bring the real estate rate up to $0.551 per $100 and the personal property rate to $1.905 per $100.
Only one resident, Peggy Messer, spoke about the proposed rates during the public hearing that preceded the votes. She asked the council to keep the rate what it was, saying there were a lot of “single parents” and others who “struggle to come up with their taxes.”
When it came time to vote, no council member made a motion to keep the rate the same, so no vote took place.
Council Member Stephen Chapman made a motion for the middle rate, but no council member was willing to give a second, so no vote took place on that rate either.
Finally, Council Member Julie Navarre made a motion for the highest proposed rate, which Council Member Paula Graszus seconded. Navarre and Graszus then voted in favor of the rate, but the other council members voted against it.
This effectively left the city without a property tax rate.
Navarre then recommended calling for another vote on the middle rate.
The council voted again; this time Chapman, Graszus and Navarre voted in favor of the middle rate. Council Members David Ziegler and Abby Miller voted against it.
Chapman said the city usually collects about 97% of the real estate property tax it bills. With the new rate, the city expected to take in about $105,000 more dollars this year if it successfully collected 97% again.
For a resident with a house valued at roughly $200,000, this would mean they would pay about $5.83 more per month in real estate tax, according to city calculations.
There was some brief discussion at the end of the meeting of what the city hoped to do with that money. City Administrator Scott Smith said the new revenue would allow them to make road improvements and various beautification improvements to the central business district, such as new light and flag poles, flowers and new benches.
Other possible uses of the money included improving the sound system in the city council chambers and investing into the new amphitheater in Ludlow Memorial Park, for which the city has already received a donation of about $50,000.
“With this increase in tax, it will give us just a little bit of buffer,” Scott said.
“I think it’s a great start,” said