May 24, 2005

Nashville's Proposed Tax Increase

As expected, Mayor Bill Purcell has requested a tax increase for Metro's budget. The proposal includes a half-a-cent increase in the local sales tax and an increase in property taxes. For some reason, I'm seeing mixed numbers on the property tax increase. Some sources are saying that it's a 24 cent increase while others are saying 84 cents.

More later.

Update - 4:01 pm: From Ben Cunningham regarding the actual amount of the property tax increase...

The tax increase is, in fact, 84 cents.

By state law the property tax rate must be reduced after a re-appraisal so that the re-appraisal is revenue neutral, i.e., a county may not make money from a re-appraisal.

This new lower rate is called the "certified rate". For Davidson county the old rate was $4.58, for every 100 dollars of assessed value, before the the re-appraisal. The re-appraisal resulted in a new certified rate of $3.98. The tax increase of 84 cents is then added to this new certified rate which results in a rate of $4.82. That is the rate that Mayor Purcell is proposing.

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