Wed
Dec 26 2007
04:55 am
"Homeowners facing state, local property tax increases of 50 percent"
By: jbr

I guess we may need the funding source in order to hand out things like $6 million TIFs.

(link...)
bizgrrl's picture

That big $300 tax refund a

Submitted by bizgrrl on Wed, 2007/12/26 - 8:08am.

That big $300 tax refund a couple of years ago was helpful, I'm sure. When the feds cut back on taxes and their assistance on the local level the locals have to raise taxes. Gotta fund that No Child Left Behind.

Michael's picture

What do property tax hikes

Submitted by Michael on Wed, 2007/12/26 - 9:24am.

What do property tax hikes in Indianapolis have to do with TIFs in Knoxville?

Johnny Ringo's picture

"What do property tax hikes

Submitted by Johnny Ringo on Wed, 2007/12/26 - 9:29am.

"What do property tax hikes in Indianapolis have to do with TIFs in Knoxville?"

It's all part of the narrative. When we get a change in the White house, things like this will be seen as "responsible investments in education and infrastructure."

SColfax's picture

Tennessee doesn't have a

Submitted by SColfax on Wed, 2007/12/26 - 10:37am.

Tennessee doesn't have a state property tax on homeowner's. This is an AP wire story generally used as holiday filler. Of course a responsible paper would point these things out, along with the fact local property taxes haven't risen nearly at the 50% rate, even factoring in that property values did here during the same period of time. But, then again, it is the KNS.

Michael's picture

No need for responsibility

Submitted by Michael on Wed, 2007/12/26 - 11:06am.

No need for responsibility on the part of the reader? If you need the first word of the article "pointed out" to you, you're probably not reading very closely anyway.
~m.

Brian A.'s picture

Analysts cite a number of

Submitted by Brian A. on Wed, 2007/12/26 - 11:15am.

Analysts cite a number of reasons for the dramatic bill increases including local governments and states leaning more heavily on property taxes to meet revenue shortfalls and rising home values pushing up assessments.

It looks like that "problem" is being taken care of.

Brian A.
I'd rather be cycling.

Michael's picture

In Tennessee, if property

Submitted by Michael on Wed, 2007/12/26 - 11:39am.

In Tennessee, if property assessments cause taxes to rise, an adjustment is required to be made to the rate to mitigate that rise to produce the same revenue.
~m.

R. Neal's picture

That's what I thought, too.

Submitted by R. Neal on Wed, 2007/12/26 - 11:46am.

That's what I thought, too. But in the last reassessment they somehow were able to raise the assessment and the rate, and our taxes.

I think there's an exception for "budgetary needs" or something, and all they have to do is have a public hearing and the legislative bodies (county commission or city council) can vote it in.

Bill Lyons's picture

Assessment and tax receipts

Submitted by Bill Lyons on Wed, 2007/12/26 - 12:34pm.

I don't know if this is helpful but the way it works is that the assessment process cannot raise the overall amount of tax revenues received. The rate has to adjusted downward as necessary to make the process revenue neutral.

However if one's home was judged to have increased in value greater than the average amount in the jurisdiction actual taxes paid will go up. Of course the extension is that those whose homes increase less than average should see a decrease in their tax bill. It all has to equal out. I am not aware of any "exceptions" that city councils and county commissions can vote in. Real growth is the only way to increase revenue through property taxes. Of course the sales tax portion does go up with inflation.

This puts Tennessee local governments in the position of not having a built-in inflation adjustment for the property tax portion of their revenue stream (largest component). The states, to some degree, and the Feds, to a great degree, do a lot better keeping up with inflation.

R. Neal's picture

TCA 67-5-1702.

Submitted by R. Neal on Wed, 2007/12/26 - 1:21pm.

It all has to equal out. I am not aware of any "exceptions" that city councils and county commissions can vote in.

I'm pretty sure I recall that the following is what Blount Co. used to get around the "equalized" rate:

TCA 67-5-1702. Levy in excess of certified rate. —

No tax rate in excess of the certified tax rate as provided for in § 67-5-1701 shall be levied by the governing body of any county or of any municipality until a resolution or ordinance has been approved by the governing body according to the following procedure:

(1) The governing body shall advertise its intent to exceed the certified tax rate in a newspaper of general circulation in the county, and the chief executive officer of the county or municipality, as appropriate, shall within thirty (30) days after publication furnish to the state board of equalization an affidavit of publication; and

(2) The governing body, after public hearing, may adopt a resolution or ordinance levying a tax rate in excess of the certified tax rate.

[Acts 1979, ch. 253, § 2; T.C.A., § 67-1017.]

Bill Lyons's picture

Certified rates, etc.

Submitted by Bill Lyons on Wed, 2007/12/26 - 2:50pm.

That is interesting. I think that 1701 and 1702 are in reference to exceeding the "certified rate." This seems to refer to a temporary adjustment pending an appeal as in 1701 - 5 (see below). Clearly this has to stand review by the state board of equalization or corrective action would have to be taken later. Such action, if necessary, would cause extreme budgeting headaches and political discomfort in the subsequent year.

I would be very surprised if a city or county can circumvent the clear intent of the General Assembly as specified in section (3). "Exclusive of such new construction, improvements and deletions, each governing body, in the event of a general reappraisal as determined by the state board, shall determine and certify a tax rate which will provide the same ad valorem revenue for that jurisdiction as was levied during the previous year."

Of course councils or commissions can always increase the rate above that which is "certified" to produce more revenue but they have to provide notice and vote to do so on two separate readings. The intent of this section is to prevent the city or county from gaining new revenue automatically through the reappraisal process without an explicit public vote to do so and the accountability that goes with such a vote.

(5)In calculating the certified tax rate, the governing body of the county or municipality may adjust the calculation, according to a method approved by the state board of equalization, to reflect extraordinary assessment changes anticipated from appeals to the state or local boards of equalization. The state board of equalization shall order recapture of an excessive adjustment in the following year if the certified tax rate is found to have been overstated due to overestimation of the appeals adjustment, and in these cases the jurisdiction may exceed the recapture rate only after public hearing.

R. Neal's picture

Agreed. And hat's exactly

Submitted by R. Neal on Wed, 2007/12/26 - 2:52pm.

Agreed. And hat's exactly what they did in Blount Co.

Bill Lyons's picture

You are right. This has gone around the circle.

Submitted by Bill Lyons on Wed, 2007/12/26 - 3:32pm.

You are right, and you did point out in your first post that they did in fact vote for an increase. I guess this went in a big circle but does underscore the fact that increased property tax bills for a property owner in Tennessee are not a function of increasing property assessments but rather reflect explicit actions by elected representatives. The exception is on the margins when one's property has been judged to have increased in value at a greater than average rate for the city or county.

Tess's picture

negotiation is possible

Submitted by Tess on Wed, 2007/12/26 - 12:55pm.

You can negotiate with the Knox County assessor too, I understand, if it does go up and you don't agree.

reform4's picture

Not a good link between the

Submitted by reform4 on Thu, 2007/12/27 - 9:29am.

Not a good link between the article and the KnoxViews headline, but it does bring to mind the coming budget crisis. A majority of our expenses are salaries (teachers, police) driven by cost of living increases, while property taxes are going to stagnate from the freeze (which I support), falling property values affecting even new construction, AND the Commissions new penchant for handing out new TIFs.

What if these developers default or don't build out fully according to their proposed plans? What if we overbuild commercially and the commercial values fall? What if the extra debt ($150 million) from all developers asking for TIF causes our bond rating to fall and we have to pay more for other bond issues (schools?)?

Higher property taxes for the average homeowner, that's what.

-----------------------------------------
Fighting for Reform and Representation, Fourth District
Steve Drevik, Commission Seat 4-B
(link...)

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