Pulaski County landowners may be paying more in property taxes next year. An ordinance that would “thaw” the county’s property tax levy freeze was presented during Monday’s county council meeting. That means the county’s tax levy would be able to increase, within the limits set by the state’s growth quotient.
Council Member Ken Boswell explained that it’s kind of like a cost of living increase for the county government. “Looking off of 2018 because we don’t know what 2019 altogether would’ve been, it would’ve been a .0189 increase, is what the state would’ve allowed us to increase property taxes by, which would’ve equated to about $6.07 per $150,000,” he said.
Several years ago, the county decided not to get that increase using property taxes, but by using a local income tax instead. The problem is that there hasn’t been enough income tax revenue to keep up, according to Community Development Commission Executive Director Nathan Origer. “We are at the point now where the money we are losing relative to what we could have been bringing in if we had never frozen that levy, our Levy Freeze Income Tax rate would actually have to be 1.1 percent, roughly, which is higher than the one percent that is allowed,” he explained.
While Fiscal Planning Consultant Jeffrey Peters originally thought the county had until the end of October to make changes to the tax structure that would impact the 2020 budget, he’s since learned that the Department of Local Government Finance has set the deadline at the end of this month. Council President Jay Sullivan said that even though the ordinance would give the council permission to raise the property tax levy, they wouldn’t have to increase it by the maximum allowable amount. But others were concerned that the language of the proposed ordinance implied that they would.
Sullivan noted that one of the county’s income taxes – a tax made to fund construction of the Justice Center but also used for its operations – will go away next year. “That’s going bye-bye,” he said. “So that’s a big part of it right there. We don’t want to take it all out of income tax because we’re the highest income tax or one of the highest income taxes in the state. I kind of want to shift that a little bit and see what we can get out of the property tax. So if we thaw that, that will give us that opportunity, anyway.”
But Origer felt the county was beyond the point of simply trying to balance its taxes and is now into “survival mode.” “Quite honestly, I’m going to put it out there. If you don’t thaw this freeze and raise the maximum levy, you do not deserve to represent the people of Pulaski County at this table,” Origer said. “That’s as simple as it is. It is as simple as it is.”
Council members voted to approve the ordinance on first reading. It will be up for final approval during a special session to take place next Monday at 6:00 p.m. EDT at the Pulaski County Highway Garage.