With more than $200 million worth of disputed property assessments in Gallatin being appealed to the state, city leaders have taken an initial step towards raising property taxes to help protect against any potential lost revenue as a result of the process.
City leaders were informed by Sumner County Assessor of Property John Isbell last week that as a result of the recently completed mass reappraisal of all property in the county, Gallatin’s new certified tax rate would be set at 80 cents per $100 of assessed value.
The revenue-neutral rate is required to be set by state law after each reappraisal in order to prevent local governments from automatically collecting more money in tax revenues as a result of the process.
On Tuesday, the Gallatin City Council unanimously moved a proposal out of committee that would set the city’s tax rate at 84 cents. While the rate would be 15 cents less than the current rate, it would still exceed the certified rate by 4 cents.
“My concern is we do have quite a few appeals going to the state,” Mayor Paige Brown said during the meeting. “That number could go up.”
The owners of $200.7 million worth of property in Gallatin have filed an appeal with the state asking that their property values be lowered, according to data provided by the city. If all of the appeals are granted, the new values would total $131.3 million – a difference of $69.4 million. The change would result in a loss of $626,431 in tax revenue for the city.
It would take 8 cents more than the certified tax rate of 80 cents to make up the entire difference, according to Gallatin Finance Director Rachel Nichols.
“I feel like the timing of it is a real injustice to our residents,” Brown said adding the city would not know the outcome of the appeals to the state in time to set a new tax rate. “The other option would be to see what this does and then next year increase the tax rate if we have to.
“Either way, we’re in a jam.”
Brown also encouraged city leaders to lower the tax rate next year if the city ends up “taking (in) more than we need to match that revenue that is being projected.”
Gallatin’s new fiscal year for 2019-20 started July 1. The city’s current property tax rate is currently 99 cents.
A vote on the new tax rate could take place as early as Tuesday, Sept. 3 and can only happen once a public notice has been posted for at least 10 days prior.