COVINGTON, KY (FOX19) - Covington property owners will see higher tax rates when they receive tax bills in the mail next month.
The City of Covington Board of Commissioners approved an increase in the property tax rate at its meeting Tuesday.
The effect of the rate increase on a home assessed at $100,000 would be an additional $8.50 per year, according to city officials. The same $100,000 home with homestead exemption would pay only about $5.36 extra per year.
Officials said the decision came after a spirited debate about fiscal responsibility and the cost of providing services. Much of the discussion hinged on public safety, fire and police staffing and the need to grow revenue and fund infrastructure and capital expenses.
The new rate remains below the average city property tax rate in Kenton County, according to a press release from the city.
The previous real and personal property tax rate of 3.045 percent will be increased to 3.130 and 3.332 percent, respectively. The new rate will be effective for 2015-16 tax bills, which are expected to be mailed out on September 15 and are due October 15.
Kentucky law allows cities to increase tax rates by the compensating rate plus an additional 4 percent without the rate being subject to a possible recall vote. The compensating tax rate is the rate calculated to produce an amount of revenue approximately equal to revenue produced the preceding year from real property taxes. The rate ensures that cities can rely on a consistent revenue amount each year despite changes in property value assessments.
This is the first time since 2002 that the City has increased property tax rates beyond the compensating rate. This follows years of reducing expenditures in its General Fund, including staff reductions. Officials said it is expected to generate over $250,000 in general revenue funds.
While the Commissioners did not specifically attach the increase in funds to public safety staffing, taking the allowable rate was the first step in the plan for adding public safety staff that has been presented to the Commissioners at the past several meetings, the city said.