The Knox City Council has approved some budget reductions to compensate for the circuit breaker credit.
Clerk-Treasurer Jeff Houston reminded council members Tuesday that the circuit breaker places a cap on the amount of property taxes property owners have to pay. “For most people that’s got a homestead deduction, it’s one percent you’re property taxes are capped at,” he explained. “For residential properties and agricultural land and long-term care facilities, it’s two percent, and non-residential properties and personal property is capped at three percent. So no matter how much you ask for, you’re only going to get that amount of money from the taxpayers.”
Houston said the city has come to expect the reductions each year and builds them into its budget. “So when we get our report back from the state that tells us how much the circuit breaker is going to be, then we make this adjustment and this budget reduction,” he said. “And this was suggested to us by the Department of Local Government Finance last year for our budget this year, so we have to do it again this year.”
He said the city’s estimates ended up being pretty close to the final figures from the state. The General Fund will take the biggest hit, with a reduction of nearly $200,000. Houston said that will be shared proportionally among the various departments.
He presented a formal budget reduction resolution for the council’s approval Tuesday. “It’s more for paperwork purposes more than anything else, because it lets the Department of Local Government Finance realize that we do not have this money coming in,” Houston explained. “We cannot fund this budget this year or next year with any of this tax cap money. This is money we will not receive. So it’s as if we spent it. It never was here.”
The city council approved the resolution unanimously.
