Note: This story was last updated at 5 p.m.
Roane County properties showed an overall 3.47 percent drop in assessed values in the five-year reappraisal process taken over by state officials this year, and the tax-neutral property tax rate in the City of Oak Ridge has been calculated at $2.52, the Tennessee Comptroller’s Office announced Thursday.
The tax-neutral rate is up from the current $2.39 per $100 of assessed value, a 13-cent increase.
Separately, the Oak Ridge City Council has been asked to consider a tax rate increase of up to eight cents, with a one-cent increase requested by the municipal staff and a seven-cent increase requested by the Oak Ridge Board of Education. The one-cent increase would help maintain city services and allow for a 2 percent pay raise for city employees, and the seven-cent increase would help cover a deficit and add money for salaries and staff, including a 3 percent pay raise.
Any tax increase, if approved by city officials, would be in addition to the tax-neutral rate calculated by the state. Each additional cent on the property tax rate generates about another $90,000 in revenue. A one-cent increase would cost the owner of a $145,000 house another $3.63 per year. An eight-cent increase could cost that homeowner another $29 per year.
The Oak Ridge City Council has not yet adopted a new budget or tax rate for the fiscal year that began July 1, primarily because city officials were waiting for the Roane County reappraisals to be completed.
The Comptroller’s Division of Property Assessments called Thursday’s announcement “a significant milestone in its effort to ensure a fair and accurate property reappraisal for the citizens of Roane County.”
The City Council in June approved the city’s version of a continuing resolution, carrying the 2014-2015 appropriations and tax rate into the current fiscal year.
Oak Ridge City Manager Mark Watson said City Council could now adopt a budget and tax rate for the new fiscal year on second and final reading on July 27. That special meeting starts at 7 p.m. July 21 in the Municipal Building Courtroom.
Before then, Council is expected to discuss the budget during a work session on Tuesday, 21. The work session will start at 6 p.m. July 21 in the Central Services Complex on Woodbury Lane.
Tennessee officials said the tax-neutral rate is neither a cap nor a minimum, it is just a measure of tax neutrality.
“The tax rate actually adopted in the reappraisal year (2015) cannot exceed the tax-neutral rate without newspaper notice and a public hearing, but the city could adopt an actual rate less than the tax-neutral rate in the same manner as it would in a non-reappraisal year,” said John Dunn, public information officer for the Tennessee Comptroller of the Treasury.
The tax-neutral rate is designed to bring in the same amount of revenue after an appraisal as before, so that if a county’s overall assessment goes down, the tax-neutral rate goes up, and vice versa.
In its Thursday announcement, the Division of Property Assessments said it is confident that property values in Roane County for tax year 2015 now meet acceptable standards.
“The (Roane County property assessor) and his staff can now begin sending new value notices to Roane County property owners, and provide taxpayers with both informal and formal opportunities to appeal individual assessments,” a press release said.
Watson said the announcement is like a final draft from the state.
“We’ll kind of take it from there,” he said. “It’s good to know that they are at this stage. That’s a littler further along than we had expected.”
It’s not clear yet how long the appeals process might take.
But with both the Comptroller’s Office and the Roane County property assessor working on assessments, “I would hope that our values are more accurate than they have been in the past,” Watson said.
The impact of higher state-certified tax rates can vary depending upon whether an individual property has increased or decreased in value, or stayed the same. Watson said his home increased in value, so with the new higher certified rate, his property taxes will increase.
The State Board of Equalization directed the Division of Property Assessments on February 26 to “take all steps necessary to complete the reappraisal process (in Roane County) after serious concerns were raised about the ability of the assessor and his staff to manage the process in a timely manner,” state officials said.
“Division staff overcame numerous challenges and corrected significant errors during their time in Roane County,” the press release said. “To date, 12 Comptroller employees have worked nearly 2,400 hours to achieve confidence in the process. Division staff will remain available to assist in the appeal process.”
Comptroller staff will provide a more in-depth presentation to the Roane County Commission during its scheduled meeting at 7 p.m. August 10.
The press release said the tax-neutral rate for Roane County is still being calculated.
“The people of Roane County deserve a fair and accurate reappraisal,” Comptroller Chief of Staff Jason Mumpower said. “I am encouraged by our progress to date, and we will remain engaged throughout the appeal process. Finally, we will continue to ensure the Roane County assessor’s office is equipped to manage the process going forward.”
Assessed values also dropped in Anderson County in this year’s reappraisals. The overall decline was 4 percent. That’s unprecedented, officials said, pointing out that property values have never gone down in an reappraisal.
An overall drop in property values will require a tax rate increase because the revenues after the reappraisals have to remain the same as they were before. Officials in Anderson County have said the tax rate could be increased by 14 cents or more.
Most of Oak Ridge is in Anderson County, but the western portion is in Roane.
The Anderson County Commission has been asked to consider the equivalent of a 22-cent tax increase, with most of that (18 cents) earmarked for a 4 percent pay raise for teachers and staff at Anderson County Schools. The request includes the equivalent of another four cents for $178,000 for capital outlay costs (needed school roof repairs and state-mandated upgrades to physical education facilities) and $178,000 for what are known as one-to-one devices or electronic tablets.
Each penny on the Anderson County property tax rate generates another $152,000. About $89,000 raised by each one-cent increase would go to Anderson County Schools, and some new revenues would also flow to Clinton and Oak Ridge schools.
The Anderson County Commission could resume its budget discussions on Monday, July 20, starting at 6:30 p.m. in Room 312 of the Anderson County Courthouse in Clinton.
More information will be added as it becomes available.
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