The property tax rate will drop

Aug. 17—Proposed property tax rates for the City of Owensboro will remain unchanged or decrease slightly in the current fiscal year, although tax revenue will increase due to assessment changes.

City tax rates introduced by city commissioners on Tuesday night include a reduction in the city’s personal property tax rate. The current personal property tax rate is 33.02 cents per $100 of property assessment. The tax rate order introduced on Tuesday lowers the rate to 27.61 cents.

Real estate and vehicle rates will remain the same, at 26.40 cents per $100 of assessed value, and vehicle taxes will remain at 30.30 cents.

City finance director Angela Waninger said the personal property tax rate is set by a calculation made by the state’s local government department, based on the city’s property rate. The calculation is also based on tax revenue and revenue projections from the previous year.

Personal property taxes include a business equipment tax. Waninger said the rise in assessments means the city will generate more revenue this year, even at the lower tax rate. Last year, the city forecast $1.1 million in property tax revenue. For the current fiscal year, the city is forecasting $1.254 million in personal property tax revenue.

“Personal assets (income) would increase even with the lower tax rate,” she said.

Property taxes are expected to bring in $10.420 million this fiscal year. The municipal vehicle tax will collect approximately $1.223 million. The city could have raised property taxes by up to 4% without the increase being recalled, Waninger said.

“We don’t take the rates that we could,” she said. “The commission is being climate sensitive by keeping rates” stable.

Mayor Tom Watson said the city’s economy is healthy.

“They tell me it’s as strong as it’s ever been,” he said. “Our general fund is $26-29 million. That’s up from $3 million a few years ago.”

Some of those general funds came from federal CARES and American Rescue Plan Act funds, Watson said, but “a lot of it is good tax liability.”

When Watson took office six years ago, he said, the city must have had a general fund deficit of $17.5 million. Watson said city officials and staff are working to manage finances.

“Financial responsibility for the commission seems to be key,” he said. “Our municipal workers have done a good job.”

James Mayse, 270-691-7303, [email protected], Twitter: @JamesMayse

Penny D. Jackson