Maintaining Fiscal Discipline
Lowering County Property Taxes
This past fall we set the county's Real Property Tax Rate at 10.9 cents per $100 of valuation thereby matching the county's lowest tax rate in twenty years AND for the first time ever placing the rate below the state's established "compensating rate". In contrast, this year's compensating rate would have been 11.0 and the state's "customary" 4% growth rate would have been 11.4 cents; a 5% increase over last year. This is the fourth year out of the last seven that county government has not levied the maximum 4% growth rate.
In making this decision, I believed it was important to consider many county residents have lost their jobs, suffered reduced hours, had overtime opportunities eliminated, or been forced to take jobs paying much less over the last year. With so many of our friends, families, and neighbors enduring such economic strife, it is difficult to justify taking more money from their remaining income. Much like them, I feel our taxing authorities must also tighten their belts and manage within their means.
Now is not the time to increase tax rates on these families. While raising taxes is always a difficult decision to make, to increase rates now would place an additional hardship on so many struggling households at a time when they are most vulnerable.
In late July or early August each year state government notifies each taxing authority of the total valuation of property in their district, the calculated "compensating tax rate", and the "4% growth tax rate".
Kentucky statutes define the "compensating tax rate" as that rate which, excluding new property added to the tax rolls during the last year, will produce the same revenue as generated the previous year.
In contrast the frequently used "4% growth rate", the maximum rate the state allows a local taxing authority to set without the possibility of voter recall, would produce revenue which is 4% greater than the previous tax year.
For decades previous fiscal courts always set property tax rates at the level necessary to receive the maximum 4% growth in tax revenue allowed by state statute without the possibility of voter recall. During this Administration we have moved away from automatically levying the maximum rate to a more detailed evaluation of matching the tax rate to the government's need for revenue while considering the impact on taxpayers.
Additionally, along with maintaining one of the lowest property tax rates in the state, Hardin County Government continues NOT to impose any of the taxes many other counties use for revenue sources such as an occupational tax, a library tax, an insurance premium tax, or fire district taxes."
Increasing costs to maintain current operating levels for county government will be a challenge with these proposed tax rates. Keeping our rates at or below the compensating rates will mean approximately $240,000 less in projected county government revenue from total taxes versus those amounts budgeted for the fiscal year.
While county government has been very successful during the past seven years of eliminating waste and redundancy along with more efficient operations, we will continue to search for other savings to reduce the impact of receiving less than the budgeted amount of tax revenue.
In the worst case scenario, it may be necessary for county government to utilize a modest amount of the county's reserve funds to make ends meet. After all, isn't that what savings or a "rainy day fund" is there for – difficult times? Using a relatively small amount from our savings account is a better solution than asking so many during troubled times to sacrifice yet more by paying higher taxes.
When the day is done, we must ask ourselves, what are our expectations of government and how much are we willing to pay for it? The most effective way of meeting urgent needs is to keep as much money as we can in the hands of our families during these economically challenging times.