Request By:
Mr. Charles T. Stevens
62 Ivy Lane
Winchester, Kentucky 40391
Opinion
Opinion By: Robert F. Stephens, Attorney General; By William S. Riley, Assistant Attorney General
In your recent letter to the Attorney General it is stated that Winchester, Kentucky, a city of 15,000-16,000 people, has never had a revaluation of the real property. The city is facing an increasing financial deficit. A city payroll tax has been proposed. Two questions are asked:
(1) Under KRS 132.425, can the city revalue property at 100% of full cash value and retain the current tax rate?
Answer: KRS 132.425 which covers net assessment growth must be read in connection with KRS 132.027 which provides that notwithstanding any statutory provisions to the contrary, no city shall levy a rate which exceeds the compensating tax rate defined in KRS 132.010, except that adjustments may be made by any city which levied a poll tax in 1973.
KRS 132.010(6) defines compensating tax rate to mean that rate which when rounded to the next higher 1/10 of one cent per $100 of assessed value and applied to the 1972 assessment of property subject to taxation by a taxing district, excluding net assessment growth as defined in KRS 132.425, produces an amount of revenue approximately equal to that produced in 1971.
(2) Can Winchester, as a third class city, raise its tax rate to a maximum of $1.00 by referendum vote?
Answer: The city legislative body must establish the city tax rate under the rollback law provisions. See KRS 132.027 and 132.010, subject to the applicable limitations of Section 157 of the Kentucky Constitution concerning maximum tax rates. Section 158 of the Kentucky Constitution deals with indebtedness limitations only. This is a tax rate question. See 26 Am.Jur.2d, Elections, Section 183, which points out that a valid election cannot be called and held except by authority of law. In the absence of a constitutional provision permitting a referendum vote on tax rates, such action would be prohibited by the City of Winchester.