Council reverses decision to raise property taxes
Rate will remain 8.9 cents per 100 dollars of value
BEREA—Council has scrapped plans to hike municipal property taxes from 8.9 cents per every assessed $100 of value, to 9.1 cents. The rate will remain at the lower amount, the same rate as last year.
During a work session held last month, Council agreed to raise the rate, having been apprised that property values in Berea had trended significantly upward. Accordingly, at the succeeding Council meeting, an ordinance to raise the property tax rate had its first reading.
In last night’s work session, however, Councilmembers debated for over a quarter of an hour how to accommodate what is best for Bereans individually and as a whole, and eventually agreed to reverse their previous decision, keeping the current tax rate.
Councilmember Teresa Scenters was first to voice opposition to the rate during last night’s work session, noting that the amount it would generate was expected to be only 27,000 dollars annually.
“It’s not going to hurt us, either way,” Scenters said.
Councilmember Cora Jane Wilson agreed, saying that it might be difficult for some residents to manage in a year with a new 911 fee, which has yet to be determined.
“Electric rates, gasoline, 911 [fees] are all up,” Councilmember Jerry Little said, his voice breaking as he explained why he reversed his previous support for the increase. “Some people in the City do not have more than but a thousand dollars a month, it’d make you cry. Three dollars here, four dollars there—it hurts them,” he said. “Government is always adding on, not reducing costs.”
Countering this were Councilmembers Ronnie Terrill and John Payne. Terrill blamed Council’s tax rate re-think on Madison County Judge Executive Reagan Taylor, who last week proclaimed during a regularly scheduled Fiscal Court meeting, that it was good governance the County would lower property tax rates this year, as it has multiple times since Taylor took office in 2015.
“We’re not the County,” Terrill said. “We should raise it as we already said. Twenty-seven thousand [dollars] will pay for blacktop. We should do it.”
Payne argued that raising the rate now would help the City keep pace with inflation in the future, and at about $3.00 of additional tax annually on a $100,000 home, as the rate hike would equal, said, “That’s not a high bar to cross. It’s a quarter a month. I grew up poor. We had an outhouse and didn’t have running water until I was five, but I am sure my parents would have been willing to pay a quarter a month.”
Payne also reminded Council that federal grants such as the CSEPP funding for the chemical weapons decommissioning project at the Blue Grass Army Depot, and other federal grant funds, are ending. “We can’t rely on them anymore to run our city. I feel this [rate hike] is a necessity,” he said.
Councilmember Steve Caudill, who is also head of the Council’s finance committee, agreed with that logic, saying that to not raise the tax rate would leave the City vulnerable to falling behind. “We should take the 4% when we can. Otherwise it compounds on itself,” he said. If that were to happen, Caudill expressed fears that the Council would need to raise rates higher than 4% of the compensating rate, forcing a vote and possibly a recall of Councilmembers.
Caudill was referencing the state’s compensating tax rate, a mechanism for keeping property taxes stable from year to year. The compensating rate is the amount the municipality needs to charge in order to collect the same revenues annually.
Since property values in Berea have increased across the board, the state’s compensating rate law says that the local property tax rate should be lowered to the extent that the rate would generate the same revenue as it did last fiscal year.
But the law also allows taxing entities to add 4% of that compensating rate value to the tax burden of residents, if doing so is deemed necessary to keep up with rising municipal costs. Anything higher than 4%, and the law stipulates a public vote for passage. Setting tax rates higher than the compensating rate plus 4% also exposes local government leaders to the threat of a recall.
Councilmember Steve Davis said he’d been against a rate hike from the beginning.
Mayor Bruce Fraley asked if those who were in favor of the rate hike could live with not raising it. After more discussion, eventually Terrill and Caudill agreed to not raise the rate.
“This is not the hill I want to die on,” Caudill said. “When the 911 fees hit, this will be a problem.”
A motion was made to change the language of the tax hike ordinance (12-2025) to reflect last year’s rate.
Councilmember Katie Startzman was absent from the work session.
Next, there was a public hearing where the City’s finance director, Susan Helton, announced what this fiscal year’s tax rate will be. During the hearing’s public comment section, Berea resident, Randy Dickson, addressed the Council and said it had been interesting to witness the work session and see how local laws are made.
Dickson expressed his support for a higher tax rate as he now understood how Council goes about setting it, and suggested the extra income might come in handy. Dickson referenced, for example, a recent request from Police Chief Jason Hays to go over his line item budget for this fiscal year in order to replace a vehicle that had been wrecked. Dickson urged other citizens to attend work sessions, to fully understand how decisions are made in the City.
Last came the regularly scheduled first meeting of the month. When the ordinance received its second reading, it passed in a unanimous voice vote, 7 to 0, with Startzman absent.
During the Mayor’s comments, Fraley told the crowd assembled in the room, that he was proud to work with this Council because of how it conducts its business with “professionalism and respect.” Fraley also commended Helton and the city’s administrator, Shawn Sandlin, for their contributions to the entire process.
Other City business addressed at the meeting was primarily a redux of the last meeting, with Ordinance 11-2025 for the closing of Sycamore Street passing in a unanimous voice vote. Sandlin also announced that the City’s last fiscal year has been officially closed out. Terrill asked Sandlin to get on his request that tree limbs that cause pedestrians to duck while walking on City sidewalks be trimmed back, and Sandlin said he was already on it. There were several reminders from Council and the Mayor to attend the upcoming Spoonbread Festival the weekend of September 19.
Berea’s utilities general manager, Kevin Howard, also told Council that the electric meter project was going well, and other upgrades to the system were on schedule.
Council meets every first and third Tuesday of the month at the City Hall Annex, 304 Chestnut Street at 6:30 PM. You can also attend remotely by watching the City’s YouTube channel. Meetings are recorded and filed under the “Live” tab.
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