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VOL. 124 | NO. 119 | Friday, June 19, 2009

City, County Tax Picture Comes Into Focus

By Andy Meek

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TAXING ISSUES: The Memphis City Council this week approved a tax rate of $3.19 for the fiscal year that begins July 1. -- PHOTO BY LANCE MURPHEY

Most property owners whose appraisals increased this year will end up paying more in property taxes, based on tax rates approved this week by Memphis and Shelby County governments.

For those taxpayers, the bills will get higher even though the city and county tax rates will decrease.

The city of Memphis tax rate for the fiscal year that begins July 1 will be $3.19 for every $100 of assessed value. The current city tax rate is $3.25.

Shelby County’s property tax rate for the new fiscal year has not been finalized yet. The County Commission this week approved a tax rate of $4.02, but that figure still has to be approved on two additional votes. If that rate stays unchanged and is adopted, it would represent a 2-cent drop from the current county tax rate of $4.04.

Dropping to an increase

Because 2009 is a reappraisal year, however, those drops in the tax rates don’t mean every tax bill for every property owner automatically will get lighter. On the contrary, those figures guarantee higher tax bills for nearly every property owner who received a higher appraisal this year.

Any county property owner whose appraisal rose at least 0.5 percent will pay more in property taxes in the coming fiscal year. Property owners in Memphis whose appraisals rose more than 1.88 percent will pay more in taxes.

That also means Memphis property owners who saw higher appraisals would be hit with a double whammy of sorts. Because Memphians also pay Shelby County taxes, city property owners who got a higher appraisal would see higher city and county tax bills in the coming fiscal year.

For example, the owner of a $200,000 home in Shelby County currently pays $2,020 in property taxes at a rate of $4.04. If the appraised value of the same home rises to $200,992 and with a tax rate lowered to $4.02, the owner’s county tax bill would still be the same.

But any appraisal higher than that, and the tax bill goes up.

If the person with that $200,000 home, for example, saw the home’s appraised value rise 5 percent to $210,000, the county tax bill goes up about $90. At last year’s rate of $4.04, the bill would be $2,020, rising to $2110.50 at the new rate of $4.02.

“Shelby County government will receive more property tax revenue from this. Period. The end,” County Commissioner Mike Ritz told his colleagues this week.

On the city side, the story is similar.

The owner of that same $200,000 home paid $1,625 in city taxes at the current rate of $3.25 in Memphis.

The new $3.19 rate the City Council approved means that $200,000 appraised value could rise 1.88 percent to $203,760 and the homeowner would pay the same tax bill. Any increase in the appraised value above that percentage, and the tax bill goes up.


The council did not have any discussion this week about how the new city rate would affect property owners, nor even what the new rate actually would be. The figure was included in documents passed out to council members shortly before they voted.

In a few months, city taxpayers might also receive a special tax bill that would increase everyone’s burden, whether they received a higher appraisal or not.

If the city loses its appeal of a ruling in the long-running school funding lawsuit, the city expects to raise money to pay the judgment already ordered against it by issuing a special tax bill.

The County Commission, meanwhile, had a lively discussion this week about the impact of a $4.02 tax rate on county taxpayers.

Some commissioners thought the rate decrease should be viewed as a tax cut, since the rate dropped two cents. Others argued that didn’t matter – that the effect is the county still will receive more property tax revenue, even with the slightly lowered rate.

“What’s the difference between $4.00 and $4.02? On a $200,000 house, the difference is … $10 a year,” County Commissioner Mike Carpenter told his colleagues. “I think it’s a small price, but the fact is we can’t do what we need to do at (a lower) rate.”

Commissioner Wyatt Bunker described that approach as what’s led to the county “nickeling and dimeing” its way to a high tax rate.

“Let’s not get caught in that same old tired message that this is only $10 a year, this is only $20 a year,” Bunker said. “I’ve heard that for years and years, and that’s how our budgets get bloated.”

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