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City approves lower tax rate

October 03, 2007|Mike Wynn

The Winchester Board of Commissioners on Tuesday approved lower property tax rates that are poised to generate a 4 percent increase in revenue for city coffers this fiscal year.

The commission voted unanimously in favor of a 13.8-cent rate per $100 of assessed value on both real and personal property, amounting to a 0.1-cent decrease on the real property rate and a 1.7-cent reduction on personal property.

Each 1-cent decrease in the rate lowers taxes on $100,000 of property by $10. But officials estimate the new rates will also generate about $1.4 million in total revenue - more than $66,000 of new revenue compared to last year.

"I think it's appropriate for the city to take the rate we took," said Mayor Ed Burtner, noting the new rate is lower and still increases revenue. "I think it was a good decision by the commission."

Both rates require a second reading before taking effect.

According to the city's finance department, more than $907 million of real property and $146 million of personal property is subject to taxation in Winchester this year.

That represents growth in real property, which amounted to about $860 million last year, and personal property, which stood at about $124 million.

Tax rates are calculated inversely with property values so that the city can decrease rates as property values rise and still collect the same amount or a greater amount of revenue.

Under state law, cities can set new property rates that collect up to 4 percent more revenue than the previous year - excluding new assessments - without facing a recall.

Officials calculate that assessments on real property have increased more than 4 percent since 2006, requiring the rate to drop this year. The new rates are the maximum increase that commissioners were allowed to approve without a recall.

The commission also has an option to take the "compensating rate" of 13.3 cents, which would generate the same amount of tax revenue as the previous year, excluding new assessments, or any rate in between.

A second reading is expected at the commission's next regular meeting Oct. 16.

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