Change increase bill by 50 cents a month for $100K house
COVINGTON, Ky. – The owner of a $100,000 house in Covington will pay an extra 50 cents a month under the annual property tax rate set by the Covington Board of Commissioners on Tuesday night.
The new rate, 0.277, translates to $2.77 per each $1,000 in assessed value of real estate, up slightly from $2.71 in 2022. That’s $6 a year for the owner of a $100,000 house. Covington also set its personal property tax rate at 0.359.
Tax bills will be sent out Sept. 15.
The Board of Commissioners’ vote Tuesday was the second reading of the ordinance, with the first reading coming Aug. 31, immediately following a state-required public hearing.
Both rates represent what the Commonwealth of Kentucky calls the “allowable” rate, which is that rate which would bring in 4 percent more in revenue when the rate is applied to the same list of properties that were taxed in 2022 (i.e. no brand-new buildings factored in the equation).
All told, real and personal property tax revenue for the 2023-24 budget is projected at $9.16 million, money that goes into the General Fund to pay for expenses like police officer and firefighter salaries, helping small businesses create jobs, recreation programs, and street repairs.
As approved, Covington’s real property tax rate – seen on a historical basis – is far less than half as high as it was in the 1970s, as seen in the attached chart.
The 2022 real property tax rate, a 17 percent reduction from the $3.27 rate that’s been frozen since 2017, was the lowest in history.
City leaders said Covington was unable to make a similar cut this year because it is grappling with a projected $7.2 million hole caused by the work-from-home trend’s impact on payroll tax revenue, the biggest source of funds for the General Fund.
But, Finance Director Steve Webb pointed out, the state-permitted maximum rate for a city of Covington’s size is $15 per $1,000 in property value. At $2.77, then, Covington is setting a rate that is just over 18 percent of what it’s permitted on tax property owners.
“After a huge tax cut in 2022, the Commission decided to tweak the property rate slightly upward in the wake of the payroll tax hit in order to keep from backtracking on City services,” Webb said. “In the current inflation environment, this is extremely reasonable.”
# # #