Request By:
Hiram M. Brock, Jr.
Attorney at Law
Court and Second Streets
P.O. Box 591
Harlan, Kentucky 40831
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 you are an attorney in the City of Loyall, a fifth class city.
The question is whether the city can increase substantially its revenue from real estate taxes by increasing the assessment on property within the city.
KRS 132.027 states 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 any city which levied a poll tax in 1973 may include the revenues received from the poll tax in that year in computing the compensating tax rate for 1974 and subsequent years.
KRS 132.010(6) provides that "compensating tax rate" means that rate which, rounded to the next higher one-tenth of one cent per $100 of assessed value and applied to the 1972 assessment of the 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.
KRS 132.425 states that the difference in the total valuation of property subject to taxation by the county or school district in the preceding year, less the total valuation exempted from taxation by the homestead exemption provision of the Comstitution in each year over that exempted in the preceding year, and the total valuation of property subject to taxation by the county or school district for the current year is the net assessment growth.
The answer to your question is, therefore, in light of the above statutes there would not be a substantial increase in revenue from real estate tax simply by increasing the assessed value of property in the city. There would, however, be some increase.