Property tax hike could be in the works - Action News 5 - Memphis, Tennessee

Property tax hike could be in the works

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MEMPHIS, TN -

(WMC-TV) - A property tax hike could be on the horizon for Memphis property owners. This comes in addition to a potential property tax increase by Shelby County and was a surprise to Memphis City Council members who are working on several fronts to decrease property taxes.

The city received a letter from the State Board of Equalization March 1 that requires jurisdictions to adopt a certified tax rate.

The new certified tax rate must be based on the revalued tax base established by the recent property reappraisal.

"This is the first time I would say in 50 years we have experienced this type of situation," said Memphis Chief Administrative Officer George Little.

Property tax values dropped in 2012 so that means the city will have less money to carry out city services.

"That's a $14 million loss, which means we can't pay the police, which I know is big for the police association. We can't maintain the level of services for parks and community centers," said Little.

The city says in order to keep the same level of city services, that certified tax rate would need to increase to $3.24. The current tax rate is $3.11.

"The presentation we just heard surprised me," said Memphis City Councilman Jim Strickland. "I really thought there was going to be an effort by the administration to keep the $3.11 tax rate."

The city says some property owners might not notice the tax hike.

For example, if you usually pay $1,000 for taxes and you expected it to drop to $900 because your property value dropped, think again.

The adjustment, as the city calls it, would raise taxes back up to your previous rate to make up for lost city revenues.

Beginning July 1, you would not see the savings due to the adjustment and would end up paying the original $1,000.

The city council has the final say on the matter.

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