Countywide reappraisal programs that are required by state law and their impact on property taxes are confusing to most citizens.
A significant number of people in local governments probably don’t understand them either.
People who like to dabble in numbers—and even some who don’t– might want to take a look at the following.
At the $4.32 adjusted certified property tax rate identified by Shelby County government, homeowners with roughly a 7 percent property reappraisal cut would pay the same taxes as they did under this past year’s $4.02 rate.
This means that people who had appraisal cuts of more than 7 percent (actually 6.944 percent before rounding) would pay lower taxes at a $4.32 rate than they did at the $4.02 rate.
And people who had appraisal increases or reductions of less than 7 percent would pay higher taxes at the $4.32 rate than at the $4.02 rate.
There would be thousands of homeowners in each group.
If the 7 cents appeals allowance included in the adjusted $4.32 rate is reasonably accurate, the total amount of reduced taxes from people with tax cuts would equal the amount of increased taxes paid by people with tax increases.
Thus the government would receive the same revenue at the $4.32 rate that it received this past year at the $4.02 rate.
This comes about because this year’s reappraisal program shows for the first time in history that the county had an overall decline in property appraisal values for tax purposes.
(The above calculations do not include the 4-cent tax rate that property owners in the county outside Memphis pay in addition to the $4.02 general county rate to cover the debt service on rural school bonds. There is a separate certified rate calculation on this 4 cents.)
The purpose of reappraisal programs is to try to equalize the tax burden among property owners based on their property values. The state law requiring the identification of the certified tax rate is to inform citizens whether the government is imposing an overall tax revenue increase.
In addition to the adjusted certified tax rate identified through a formula, county Mayor Mark Luttrell has suggested a 6-cent property tax rate increase to provide more funding for schools. (Actually county mayors have no legal authority relating to schools, but mayors have tried to dabble in that area through the years.)
If the certified rate total and the 6-cent rate increase were adopted by the County Commission, the county rate would be $4.38.
At a $4.38 rate for each $100 of assessed value, the breakeven point on increased taxes would be an appraised value cut of a little more than 8 percent (8.22 percent).
People whose appraised values went down more than 8.22 percent would have a tax cut at a $4.38 rate and homeowners whose appraisals went down less than 8.22 percent or went up would have a tax increase.
On Memphis city property taxes, Memphis news media outlets have not clearly reported whether the government has identified an adjusted certified tax rate.