By Gage Wilson
For Glasgow News 1
Glasgow’s property tax rate could decrease slightly this year after the Glasgow City Council Finance Committee agreed Thursday evening to recommend a rate of 16.4 cents per $100 of assessed value.
The committee settled on what the Kentucky Department for Local Government calls a “substitute rate,” bringing to a close the discussion that began during its August meeting when an unusual shift in the city’s tax base left officials considering an option they had not encountered in recent years.
Glasgow’s current property tax rate is 16.5 cents per $100 of assessed value. The recommended substitute rate would lower that by one-tenth of a cent while still generating more revenue than the 16.2-cent compensating rate calculated for the city this year.
Finance Committee Chairman Terry Bunnell said the substitute rate allows the city to keep property tax revenue close to what was anticipated when the budget was adopted without requiring the city to maintain its current tax rate.
“We didn’t want to go backwards and bring in less dollars,” Bunnell said, explaining that the goal was to keep revenue close to the prior year while providing a slight reduction in the municipal tax rate.
During the committee’s August meeting, City Treasurer Victoria Simmons explained that Glasgow saw approximately $5 million in new growth this year, compared with roughly $11 million the year before. Combined with a decline in tangible property values, the change resulted in a compensating rate that would generate slightly less revenue than the city collected last year.
That circumstance allowed the city to consider the substitute rate.
The substitute rate is used when the initial compensating-rate calculation would not produce the minimum amount of revenue allowed because of changes in the property tax base. Simmons previously said she searched Glasgow’s past tax records for a comparable situation but was unable to find one.
At 16.4 cents per $100, the substitute rate is projected to generate $2,122,169 in property tax revenue. By comparison, the 16.2-cent compensating rate was projected to generate $2,096,289, a difference of $25,880.
Both figures exceed the amount of property tax revenue anticipated in the city’s current budget.
“It is encouraging because both the compensating rate and the substitute rate will both exceed our budgeted number,” Simmons said during the committee’s August meeting.
Bunnell acknowledged that rising expenses continue to put pressure on the city and said property tax revenue remains important in supporting its general expenditures.
“General expenditures continue to go up,” Bunnell said. “I think it’s fair and it continues to help the city move forward.”
He added that the city has been fortunate to reduce its property tax rate while attempting to maintain the revenue needed to cover those expenses.
Committee members stopped short of making a recommendation during their August meeting, opting instead to wait for additional guidance from the Department for Local Government before deciding which rate to send to the full Glasgow City Council.
With that guidance now in hand, the committee will recommend the 16.4-cent substitute rate to the council, which will ultimately decide whether to adopt it.
If approved, the rate would see a slight reduction from what Glasgow property owners paid last year.
Key Facts
– Glasgow City Council Finance Committee recommends a 16.4-cent property tax rate per $100 of assessed value
– The proposed “substitute rate” is a slight decrease from the current 16.5-cent rate
– The substitute rate would generate more revenue than the 16.2-cent compensating rate
– City Treasurer Victoria Simmons cites slower growth and lower tangible property values as factors
– The 16.4-cent rate is projected to raise about $2,122,169 in revenue
– Both the compensating and substitute rates are expected to exceed budgeted property tax revenue
– The full Glasgow City Council must decide whether to adopt the recommended rate
– Property owners would see a slight reduction from last year’s rate if the council approves the change
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