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Commissioners pledge to lower tax rate before adopting budget

Henderson County commissioners on Wednesday pledged to lower the property tax rate when they adopt a 2023-24 budget but declined to go along with Commissioner Daniel Andreotta's proposal to adopt a rate four weeks from now — two months earlier than they historically have set one.

Andreotta said he's been confronted by nervous property owners who just opened their new notice of value based on the 2023 reappraisal, which increased real property values 48 percent.

“And they’re doing the quick math and (finding), 'My property went up 40 percent, 60 percent, 80 percent. The taxes are gonna kill me.' So I’m gonna make a bold statement. No one’s property taxes have went up one penny at this moment.”

“First of all, the state statute requires us to calculate and publish a revenue neutral rate, which we do currently. … The county has always done a lot of work to have a good value for the people who pay the bills — which by the way, we don’t buy a paperclip or a pencil until we tax money away from you to do it first,” he said. “So I for one will not support any budget or tax rate that is not either at or negligibly close to revenue neutral as we can get.”

A tax rate that’s significantly above revenue neutral could have wide-ranging consequences, he added.

“I’ve gotten several calls and communications from both people who own commercial and residential rental property, and people who rent residential and commercial property. And the landlords are saying, ‘Hey, I’m gonna start jacking up rents’ … and the renters are saying, ‘Hey, my landlord’s telling me they’re gonna start jacking up my rent. That’s gonna be tough.’”

Because uncertainty is what businesses fear the most, Andreotta said, the board should commit to setting a rate by mid-March.

“I’m afraid if we wait till we adopt a budget in June a lot of damage is gonna be done that could be avoided,” he said. “Property owners, landlords and tenants — they’re worried, and I think we need to give them all the certainty we can.”

The four other commissioners responded that while they too support lowering the property tax rate, structural and legal hurdles would likely prevent them from setting a tax rate that quickly. By state law, for instance, the School Board has until May 15 to submit its 2024 budget to the Board of Commissioners. The final overall taxable value won’t be known until the 125 appeals — with more to come — are resolved. And county’s sales tax numbers from the state lag by months, preventing a reliable 2024 forecast until closer to July, Commissioner Michael Edney pointed out.

“So is it reasonable to throw out an absolute number in March, that early in the process? I don’t think so,” he said.

“I think we’re looking to lower the tax rate,” Commissioner David Hill said. “I don’t think any of us have any thoughts of keeping it the same. Getting as close to revenue neutral is the most desirable tax rate.”

Rather than adopting a 2023-24 tax rate in four weeks, County Manager John Mitchell suggested commissioners could instead declare “a consensus that there’s going to be a reduction of some kind.” When people ask him about the tax rate in the context of the sticker-shock home value spikes, “I’ve said repeatedly that there’s no contemplation of allowing the tax bill to go up by 50 percent,” he said. “I think that was a safe thing to say.”

“I think being vocal and announcing publicly the interest of this board to lower the tax rate commensurate with the increase in valuation is the appropriate thing to do at this point,” Commissioner Bill Lapsley said. “I would suggest that we continue on in the budget process as we’ve normally done. Clearly the public will be watching us and I have confidence this board will do the right thing. So I would not support changing the budget process.”

“I think we owe it to the citizens to be as thorough as possible and we are always thorough in the budget process,” Chair Rebecca McCall said. “We are all committed to giving the fairest tax rate that we can possibly come up with. We will make it as fair as possible to all the citizens and still be able to provide the EMS services, the sheriff’s services, the exceptional education process that we have and everything that we continue to do in this county that makes it so wonderful and the reason people want to live here. We are committed to definitely lowering the tax rate. I just don’t want to rush it and miss something. Let’s just say we’ll announce it as soon as we possibly can.”

Edney recommended, too, that the county publicize as clearly and emphatically as possible that the time to appeal the new values is now, not when taxpayers get their property tax bill in July.

The current schedule, which commissioners agreed to leave intact, calls for the county manager to submit a proposed budget to commissioners on May 1. Commissioners would then massage the spending plan and hold a public hearing before adopting the budget on June 5.