As is always the case, the unveiling of the “certified tax rates” for Scott County and its municipalities has create a few misunderstandings regarding the property taxes that land owners will be paying this year.
Scott County Finance Director Brian Strunk announced July 15 that the county’s certified tax rate for 2013 is $2.25. That’s three cents higher than last year’s rate of $2.22. In Oneida, Mayor Jack E. Lay announced Thursday that the city’s certified tax rate for 2013 also increased three cents, from $1.00 to $1.03.
So what is a certified tax rate? Tennessee’s laws regarding property taxes require that land and buildings be revalued “at least every six years,” according to the state comptroller’s office. In order to protect property owners from an automatic tax increase, the state must approve a tax rate that maintains the same amount of tax revenue for the county or municipality after the property reappraisal as before it. That adjusted tax rate is called the certified tax rate, and the state mandates it under its “truth-in-taxation” law. If the county’s or municipality’s property values increase, the certified tax rate will decrease from the previous year. If those values decrease, the certified tax rate must go up, so that the same amount of tax revenue is generated.
For the first time in at least recent history, Scott County’s property values declined in 2013. As a result, the certified tax rate increased by three cents in both the county and the Town of Oneida.
That does not mean land owners will see an increase in taxes, however. In fact, the certified tax rate is designed by the state to keep each property owner’s taxes as close to last year’s as possible. Some property owners’ taxes may increase slightly, while others’ may decrease slightly, depending on how their property was assessed. If the value of your home or land increased in 2013, you will pay more in taxes than you paid in 2012; if the value decreased, you should pay roughly the same in taxes, or slightly less, than you paid in 2012.
When all is said and done, the county will receive the exact amount of revenue. Strunk told the Independent Herald Monday that Scott County will generate $5.8 million in property tax revenues this year, the same amount as was generated last year.
It’s a tax increase, but it isn’t really. The tax rate increases from $2.22 to $2.25. But, by design, the amount of taxes paid by individual tax payers should remain relatively stable.