The property tax rate in Wilmore this year could be 13.1 percent higher than it was in 2010, with much of the increase compensating for lower property values. The city council approved the first reading of the most recent increase by a 5-1 vote Monday night.
The new tax rate will be set at 22.4 cents per $100 of assessed value. That means, for example, if a person owns a piece of property valued at $100,000, he or she would have to pay $224 in city property tax when it comes due Oct. 31, which is a $13 increase from 2011’s property tax.
The new property tax rate coupled with the tangible property tax rate would net the city of Wilmore $409,712.27 in revenue.
The primary reason for the tax increase was a $2 million decrease in property valuations, Mayor Harold Rainwater said.
“Part of what drives a consideration of an increase is a decrease of the tax base from an assessed value; the property values have been reduced to reflect what’s happened in economics,” Rainwater said. “It’s only $2 million, but it’s $2 million in property values. If you had the same rate as 2011, it reduces income by $3,000.”
Prior to Monday’s meeting, the governing body had discussed the tax increases at length, and members spent another 20 minutes mulling over the issue at this week’s meeting.
Councilman Lynn Cooper was the lone no vote. He began the discussion by making a motion to accept the tax rate established in 2011, which was 21.1 cents. Cooper’s reasoning was he felt the city could adjust the city’s budget during the course of the year to make up for revenue not generated by a tax increase.
“I really think we’re going to have more revenue than we anticipate,” Cooper said, adding that the city’s new financial committee could find areas in the current budget to cut as the year went on.
But councilman Jim Brumfield said the fiscal year 2013 budget was “bare bones” and there was no fat left to trim.
“If we don’t raise taxes, we’re back to cutting in the departments,” Brumfield said. “Last time we went through that exercise, I thought we had decided we were at bare bones as it was.”
Councilman Jeff James, who was initially against a tax increase, said the handwriting was on the wall.
“I’ve been on the ‘let’s hold the taxes’ side of this all along, but having looked at the numbers and anticipating what we’ve got coming in this year, the tax increase that we’re taking about is simply a reflection of the increased cost of doing what we’ve been doing,” James said. “This is an increase that happens in every household and in every community. In the future, I think we’ve got to look at what the potential cuts are in order to hold our own. Wilmore has to stay competitive with other communities in central Kentucky in order to draw people. We have great reasons to live in Wilmore besides the monetary ones.”
After more discussion, Brumfield made the motion to approve the new tax rate, which councilwoman Kim Deyer seconded.
Going into Monday’s meeting, the council was faced with four options: keep the 2011 rate; adopt a compensating rate of 21.5 cents; adopt the substitute rate, which it did, at 22.4 cents, or adopt a 4-percent increase from the substitute rate at 23.2 cents.
The council also voted unanimously to keep ad valorem property taxes the same for 2012 in a second reading on Monday. The rate includes taxes on non-real-estate property such as motor vehicles, watercraft and horse trailers, Rainwater said. The tax rate will remain 21.41 cents on each $100 of valuated property.