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VOL. 132 | NO. 102 | Tuesday, May 23, 2017

County Certified Property Tax Rate Comes In At $4.13

By Bill Dries

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Shelby County Commissioners set the certified county property tax rate at $4.13 Monday, May 22, a 24-cent drop from the current tax rate of $4.37.

The resolution approved reflects the state-approved estimate of a tax rate that will produce the same amount of revenue for county government as the current tax rate once new property values from the 2017 countywide property reappraisal are factored in.

That is approximately $784 million or 64 percent of Shelby County Mayor Mark Luttrell’s $1.2 billion budget proposal.

By state law, the resetting of the tax rate to reflect the reappraisal cannot produce a windfall for county government in terms of revenue.

The new certified rate is not the final word on the tax rate. The commission will approve next month a new county property tax rate that could increase or decrease the tax rate beyond the new certified rate.

Commission budget committee chairman Steve Basar questioned why the certified rate didn’t drop to reflect the average residential property value increase of 13.5 percent seen in the reappraisal.

“If we’re saying that the average property value went up by greater than 10 percent, then I would think to keep things level, our tax rate should go down by a commiserate amount,” he said. “I’m looking for a tax rate more in line with what people are going to expect. It’s hard for me to rubber stamp that.”

But county chief administrative officer Harvey Kennedy and county finance director Wanda Richards said there are other factors in calculating the rate including new development or growth and an allowance for appeals of reappraisal values.

“If we weren’t going to have appeals it would be $4,” Kennedy said of the certified rate. “But you are going to lose a lot of property value through the appeals process.”

Commissioner Terry Roland, who is running for Shelby County Mayor in 2018, cast the only vote against the certified rate.

“It looks like when it works out, it always works out for government and not for the people,” he said. “If you are going by what the government says you always wind up on the bottom.”

Roland and other county commissioners as well as Shelby County Trustee David Lenoir, who is also running for mayor, have called for a tax rollback once the certified rate is set. But Basar has said there don’t appear to be the seven votes needed for such a cut.

The $4.13 rate wasn’t the county administration’s first calculation. Based on the 2013 reappraisal, the administration’s first calculation was a new certified rate of around $4.06.

“What happened to seven-cents?” was the first reaction of commissioner David Reaves at Monday’s meeting. Reaves is among those who have called for a property tax cut.


State officials rejected that calculation citing the unusual nature of the 2013 reappraisal that reflected dropping property values from the low point in the worst economic downturn since the Great Depression. For the first time in memory, the county reappraisal saw a drop in overall values that causes the certified rate to be adjusted up.

The county and other local government across the state who built their estimates on the most recent reappraisal instead went back to the 2008 reappraisal and other reappraisals that reflected property values before the recession hit. Even though Shelby County’s reappraisal was in the year the recession hit, it nevertheless reflected earlier property values before the drop.

The same delay in 2013 reflected the worst years of the downturn as the slow recovery was underway.

In other action Monday, commissioners approved a tweak in an economic impact plan for the Lake District development in Lakeland.

The “urban village” mixed-use development is to include hotels, retail, office uses, assisted living and restaurants. The public improvements or infrastructure are financed with a tax increment finance – of TIF – district that amounts to an increment of the property taxes – Lakeland and Shelby County – paid by the owners of the district.

The amendment approved Monday requires that the collector streets, major utility lines and site drainage work will all be substantially complete within 24 month of the closing of the TIF financing on the project.

The commission also approved on the first of three readings ordinances that require proof of Shelby County residence for the owner of any business certified to participate in the county government contract program for minority and women-owned businesses as well as a restoration of additional points in the bidding consideration process for locally-owned small businesses in that set of regulations, which is separate from the MWBE program.

The two ordinances are among the opening set of specific policies the commission is putting in place for minority and locally-owned business goals in the awarding of county government contracts.

Commissioners approved the LOSB rule proposed by commissioner Van Turner on first reading with no debate.

There was more debate on commissioner Heidi Shafer’s proposal requiring proof of residence in the MWBE program with six commissioners abstaining on the first reading passage.

“To me you are cutting a lot of people out and you are probably going to hurt a lot of people that live in Shelby County that work for somebody that doesn’t live in Shelby County,” Roland said. “I don’t think this is the right way to do it.”

Shafer indicated there might be amendments before third and final reading next month.

“We wanted to make sure the MWBE ordinance wasn’t doing what it had historically done,” Shafer said. “They would ship it to businesses outside our area. I want to make sure we get it inside our area first.”

Commissioners also approved $23.4 million in capital funding for the current fiscal year that ends June 30 that amounts to funding for various capital projects over the summer in the county’s seven public school systems.

The money is divided based on average daily attendance with Shelby County Schools receiving $18.8 million in an 80-20 split with 20 percent divided among the six suburban school districts.

The administration is also working in the capital budget for the new fiscal year that begins July 1 to spread out another $54 million in schools capital funding across that fiscal year and the next one to keep the administration’s spending on capital in the $75 million range including non-school infrastructure projects.

PROPERTY SALES 57 94 2,713
MORTGAGES 16 37 1,820
BUILDING PERMITS 303 621 6,322
BANKRUPTCIES 138 138 1,115