KINGSPORT — Property tax notices for Model City residents will be sent out later this month — at the earliest — but it could be the first of October until the bill arrives in the mail, city finance officials said last week.
And depending on how much your property has increased in value, residents may see a bump in their property taxes this year.
Every four years Sullivan County conducts a re-appraisal of all real and personal property within its borders. The state of Tennessee then issues “certified” tax rates for the county and its municipalities — a tax rate that will generate the same amount of revenue from property taxes as the previous year.
For Kingsport, the state recommended a certified tax rate of $1.88 for it to generate the roughly $35 million in property taxes it collected last year.
But last year the tax rate was $1.97.
“What that means is (the state) felt the average of all properties in Kingsport had grown about four percent,” said City Manager John Campbell. “It’s a good statement on Kingsport and we’re probably what kept Sullivan County from being zeroed.
“We were pleasantly surprised by what the number came out at.”
However, Kingsport did not establish a property tax rate at $1.88. In July, the Board of Mayor and Aldermen approved a property tax rate of $1.94, calling the rate three cents lower than the current rate and one of the lowest in the city’s history.
“The dilemma with (the certified tax rate) is, and what most cities have trouble with is, very rarely does it yield the same amount of dollars,” Campbell said. One reason is because Kingsport has a larger than normal portion of personal property within its boundaries and it depreciates “fairly rapidly” Campbell said.
In accordance with state law, Kingsport held a public hearing and published a notice in the Times-News regarding the property tax rate exceeding the certified rate.
City officials say the $1.94 rate is necessary to achieve the revenue presented in the 2014 budget.
Kingsport collected approximately $35.3 million in property taxes last year and in the 2014 budget, city officials estimate collecting $36.7 million. In other words, the city raised the property tax rate to help balance the budget.
“The objective of the city, in our case, has always been to get the equivalent of what we got before,” Campbell said. “That’s what we were trying to do.”
Assuming your house appreciated at the same level as the overall city — four percent — then the $1.88 rate would have given you roughly the same property tax levy. Now, under the new rate, depending on the appreciation of the property, your taxes may go up this year, city officials say.
“It depends on where they are. One neighborhood appreciates a good deal, another one is stable or depreciates a little bit,” Campbell said. “Assuming your house appreciated with the average, the $1.88 may give you the same tax, but your house is worth more.”
Property taxes will be due Nov. 1 and will not be delinquent until Dec. 3.