Proposed property tax rates in Covington came before the Covington City Commission on Tuesday. The commission also discussed dates for legally-required tax hearings.
The proposal calls for 0.286 cents for every $100 of assessed real property. The proposed personal property rate calls for 0.336 cents for every $100 of personal, or tangible, property. These rates are both increases from last year’s respective rates of 0.277 cents and 0.359 cents, which, in turn, were increases from the previous year’s rates of 0.271 cents and 0.328 cents.
Property taxes are broken down into several categories. The first and usually largest chunk of your tax bill is real property tax, sometimes referred to as real estate property tax. This is essentially a tax on everything you own that’s nailed down. For residents, this means houses and other real estate property. For businesses, this means office buildings and other buildings and facilities used to conduct business.
Tangible personal property, on the other hand, generally refers to property that isn’t real estate. For residents, this includes taxable personal items. For businesses this usually includes machinery and other movable equipment and supplies.
Tuesday’s proposed rate increases were the highest allowable increases the city can pass without the risk of triggering a recall election.
By law the allowable maximum increase is the city’s compensating tax rate plus 4%. The compensating tax rate is the tax rate a taxing body needs to charge to bring in the same amount of tax money on real property as the previous year. A compensating tax rate can be greater or lesser than the preceding year, depending on how much property values have changed.
If a city wishes to raise its tax rate to a rate that generates more than 4% of the revenue brought in by the compensating rate, the citizens within that jurisdiction can form a committee to collect signatures to trigger a recall election. The number of signatures required to trigger an election must be equal to 10% of the city’s voters who cast ballots in the last presidential election. If the committee gathers enough signatures, the question of whether the tax rate should be increased is then left to the voters in the next election.
For this reason, many cities will default to a comp + 4 rate increase, as they’re often called, because it allows them to increase tax rates without the risk of being voted down.
Any tax increase of the compensating rate requires a jurisdiction to hold public hearings so the public can weigh in on the changes. The dates for Covington’s public hearings and public readings are listed below. The exact time for the hearing and first reading has not yet been determined. LINK nky will update this brief once it’s available.
- Public hearing: Thursday, Sept. 5
- First reading: Thursday, Sept. 5
- Second reading and vote: Tuesday, Sept. 10 at 6 p.m.
The hearings and readings will take place at Covington City Hall on Pike Street. Tax bills will be sent out Sept. 16.
Read LINK nky’s full property tax explainer below for a more detailed account of how property taxes work.
How do property taxes work?
Property taxes are broken down into several categories. The first and usually largest chunk of your tax bill is real property tax, sometimes referred to as real estate property tax. This is essentially a tax on everything you own that’s nailed down. For residents, this means houses and other real estate property. For businesses, this means office buildings and other buildings and facilities used to conduct business.
Tangible personal property, on the other hand, is another form of property that isn’t real estate. Depending on where you live, residents may not be taxed on personal property at all–this will vary by jurisdiction.
Depending on where you live, other tax-adjacent fees may apply.
