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LEBANON JUNCTION - A significant decrease in Lebanon Junction property values means higher taxes for local residents.
Faced with a $2.2 million drop in property values from last year, the Lebanon Junction City Council recently voted to increase the city’s property tax rate from 21.10 to 21.713 cents on each $100 of assessed value.
Under the 2012 property tax rate a Lebanon Junction resident who owns a home worth $100,000 will pay $217 in city property taxes, $6 more than last year.
While the new rate is slightly higher than last year’s, city attorney Mark Edison said the increase will simply allow the city to collect around the same amount of property revenue as it did last year.
The council increased the rate according to the state’s compensating rate, which is the formula cities use to determine the rate that produces the amount of revenue approximately equal to what was generated the previous year.
At the compensating rate, Lebanon Junction is expected to collect an estimated $158,000 in property tax revenue. Had the city not increased the property tax rate the city would receive roughly $10,000 less than it did last year, according to Edison.
And as Edison pointed out, the compensating rate doesn’t consider the rate of inflation.
“The city will collect the same amount of money, but everything costs more,” he said.
Asked why Lebanon Junction property values fell from just over $76 million to a little more than $74 million, Edison blamed a number of economic factors beyond the city’s control, such as the increase in foreclosures, the sluggish housing market and the difficulty many potential home buyers have getting credit.
“Over the past four our five years properties have been selling for about 10 percent less than they had been,” he said.
And Lebanon Junction’s not the only community seeing decreases in home prices.
While the Associated Press recently reported that U.S. home prices rose in June from the same month last year, according to the Standard & Poor’s/Case Shiller index, property values throughout Bullitt County have dropped.
Edison, who is city attorney for Fox Chase, Hebron Estates, Hillview, Hunters Hollow and Pioneer Village in addition to Lebanon Junction, said only two of the cities he serves saw an increase in property values because of new business.
In addition to a drop in property value assessments, the total value of taxable property in Lebanon Junction decreased an additional $6 million in the form of homestead tax exemptions.
While the council voted to increase Lebanon Junction’s real property tax rate they voted to lower the city’s personal property tax rate, which generally applies to boats and motor vehicles.
The 2012 rate is 21.713 cents on every $100 of assessed value. Last year’s rate was 34 cents. Under the new rate a Lebanon Junction resident with a car valued at $10,000 will pay around $22 in personal property tax, which is $12 less than under the 2011 rate.
The council opted to maintain the 2011 tax rate levied on public service companies, which include utility providers. The rate on public service companies remains 34 cents on each $100 of value of all property of public service companies in the city.
Prior to the council’s recent decision to increase real and personal property tax rates, the cities rates had not changed since 2010.
The 2012 tax rates apply to the current calendar year. Tax bills should be mailed in a matter of weeks.
All payments of taxes are due to City Hall, 271 Main Street, PO Box 69, before Jan. 1, 2013. Those who pay before Dec. 1 will receive a 2 percent discount.