COVINGTON, Ky. - Covington’s property tax rates for calendar year 2019 will remain the same for the third year in a row.
The Covington City Commission approved rates of 0.327 for real estate and 0.349 for personal property - the same as the rates for calendar years 2017 and 2018.
The rate translates to $3.27 per each $1,000 in assessed value of real estate. For example, the owner of a $100,000 home would pay $327, and the owner of a $70,000 home would pay $228.90.
The rates were the recommendation of City Manager David Johnston after months of discussion with Finance Director Muhammed Owusu and others.
"Our department heads have made a number of decisions to hold the line on spending, so we can make our budget work this year without asking for an increase from our residents," Johnston said. "Tax increases should be reserved for desperate, last-resort situations - and if we ever ask for one, it's because we're in such a situation."
The real estate and personal property taxes are projected to bring in $7,781,580 in the 2020 Fiscal Year, which began July 1.
But City officials say that state-ordered mandates for "extra" pension payments continue to create extraordinary financial stress on cities across the Commonwealth as the Bevin administration seeks to reduce unfunded liabilities in the larger Kentucky Retirement System.
On top of regular employer contributions to the public pension system for City employees, Covington was ordered to pay more than $700,000 "extra" last fiscal year and is paying an additional $1.52 million "extra" in the current fiscal year, bringing its total pension expenses this year to over $8 million. That "extra" payment is scheduled to increase to about $2.1 million next year.
By 2025 - barring relief from the state - Covington's total pension contributions are projected to reach almost $14 million a year.
"That represents about one-fourth of Covington's General Fund budget," Mayor Joe Meyer said. "That's unsustainable, unaffordable, and unreasonable."
Meanwhile, as approved, Covington’s property tax rates - seen on a historical basis - are less than half as high as they were in the 1970s.
The property rates place Covington in the middle of the pack among Kenton County cities, given that half of those cities also have separate and additional ad valorem assessments for street repairs, recreation, and fire/EMS. Covington has none of those separate assessments.
Owusu also pointed out that of the real estate taxes paid by a Covington resident, only 17 percent goes to City government, with the majority going to the Commonwealth, the school system, the county, the library, and other agencies.
Covington’s property tax bills will be mailed by Sept. 15 and are due by Oct. 15.