Rocky Top sets tax rate, with increase
The Rocky Top City Council has approved what essentially is an increase in its property taxes this year.
After a public hearing Thursday (Aug. 20) in which some residents spoke out against the increase, the council voted unanimously to set the fiscal year 2021 tax rate at $2 per $100 of property valuation, which is the same it was last year.
But that rate is 21 cents higher than the state of Tennessee-certified tax rate of $1.79 for Rocky Top for the new year, which took into account increased property values from a reappraisal this past spring.
Changing the tax rate to the state-certified amount would have kept 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 earlier. “We’re going above the certified rate. … 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, and on second and final reading Thursday after the hearing.
Bills will go out in September, and residents will have until Feb. 28 to pay their property taxes, Foster said Tuesday.
