Rocky Top plans to raise its property taxes this year by maintaining the same tax rate it had last year, even though a new countywide reappraisal this spring raised most people’s property values.
The City Council will hold an open hearing at 5:30 p.m. Aug. 20 at City Hall to receive public comment on the fiscal 2021 tax rate of $2 per $100 of property valuation, which is the same it was last year.
But that rate actually is 21 cents higher than the state of Tennessee-certified tax rate of $1.79 for Rocky Top for the new year, which takes into account the new appraisals. The certified tax rate would keep the city’s property tax collections “revenue neutral” from last year, despite the increased property values.
“The $2 is where we are currently,” City Manager Michael Foster said. “We’re going above the certified rate, which we just got about two weeks ago. You’re allowed to set your rate above the certified rate; you just have to hold a public hearing.”
The city’s new budget calls for expenditures of $2.2 million for the period from July 1, 2020, through June 30, 2021, up from about $1.5 million last year, Foster said. Some of the increase in spending comes from grants the city received for special projects.
But part of the new spending will require more property tax collections, Foster said.
“We’ve had a tight budget the past two years,” he said. “We need to have matching funds for some of our grants, and we need to do some improvements to the city. It has been hard to do with the real tight budgets we’ve had.
“COVID-19 also has cost us some revenue, but not like we thought. Sales tax receipts were down in March and April, but we have seen a rebound. We’re seeing them level back off again.”
In addition, the city has benefited from the new state sales tax collected by internet merchants on orders shipped to Rocky Top addresses, Foster said.
“The tax on internet purchases has helped us a bit,” he said. “We don’t have that many retail stores here, so the internet tax is a good thing. The state gets some, we get some.”
The council passed the $2 tax rate on first reading during its regular meeting July 16.
Unlike many other city and county governments, Rocky Top is still holding live, in-person council meetings, and will do so with the Aug. 20 public hearing and council meeting, Foster said. Other cities and counties have done remote electronic meetings in response to the COVID-19 pandemic.
“We are doing live meetings, and have been open to the public,” Foster said.
“We’re spacing everybody out. It’s worked pretty well. It’s easier for us to do that than do it online. And our members wanted to meet in person.”