Though fiscal year 2018 begins July 1, Signal Mountain and Walden will both continue to operate under their fiscal 2017 budgets until they receive the latest certified tax rate from the Hamilton County property assessor’s office.
Hamilton County Property Assessor Marty Haynes recommended in an April letter that the county and its 10 cities wait to pass their 2018 budgets due to the county’s ongoing property reappraisal and how many appeals would still be under review by the Hamilton County Board of Equalization in June.
“It has been our experience that the time requirement [to complete the reappraisal process] will exceed the current budget deadline,” Haynes said in the letter. “Reappraisals are always a challenge for our office due to the increased amount of work with the same number of employees. My staff is working diligently to provide the citizens of the county a fair and equalized assessment.”
The delay is not unusual, said Signal Mountain Mayor Chris Howley. The state mandates that each county undergo a property reappraisal every four years, and local governments need each new certified tax rate to pass their budgets. The reappraisals allow the assessor’s office to adjust property values so that every property in Hamilton County is appraised at fair market value, eliminating inequities in property values created over time by changes in the local real estate market.
“Until we get that tax rate, we can’t get our budget established,” Howley said.
The new rate, by law, must be revenue-neutral, meaning local governments can’t bring in more – or less – property tax revenues simply because property values changed after a reappraisal.
“Your taxes can’t go up because of the reassessment,” Howley told residents during a recent town hall meeting.
At the beginning of Signal Mountain’s budget discussions, Town Manager Boyd Veal said the reappraisal would create a lag, but would also give town officials breathing room as they tackled what Howley called “the toughest budget run [he’s] seen so far.”
The town could see a property tax increase of 30 cents per $100 of assessed value, Veal told council members last month. At the current tax rate, each penny would equal about $25,000-$26,000 for the town, Veal said, though that number will change once the new tax rate comes in.
The proposed increase is expected to make up for the first round of reductions from the Hall income tax, which has generated an average of $750,000 each year for the last three years. The state will completely phase the tax out by 2022, meaning town residents will likely see another property tax increase next year, said Vice Mayor Dick Gee.
This year’s proposed 30-cent increase is also expected to help fund upcoming projects like the new fire station on Shackleford Ridge Road, planned for $2 million plus $500,000 annually for staffing, and a solution for the Mountain Arts Community Center, which needs several repairs and upgrades for restoration.
The certified tax rate for both Signal Mountain and Walden are expected to be received later this year. Under the two towns’ continuation budgets, each is allowed to spend money at the current fiscal 2017 levels, meaning neither town can spend more in July 2017 than they had budgeted for July 2016. Veal said the continuation budget will not affect day-to-day operations, but could postpone funding for large purchases and major projects like paving.
Staff writer Paul Leach contributed to this story. Email him at pleach@timesfreepress.com.