The City of Morehead held a public hearing regarding the proposed real and personal tax rate increase for city residents on Friday, October 6, and many concerned citizens gathered into the meeting room at Morehead City Hall to bring their thoughts to city council and other community leaders.
If approved, the proposed increases would mean real property taxes would increase from last year’s .384 to .41, and personal property taxes would increase from last year’s .6584 to .7491. However, Helen Smith, Morehead’s City Clerk, said those numbers are largely determined by the state government, rather than city council.
“We plug the figures in that we get from the PVA office which are certified by the state,” she said. “The calculations are then done based on that.”
City councilmember Edna Shack said the state also provides a formula, called a compensating rate, which determines a way to retain the same amount of revenue from real property that the city brought in the previous year.
“It takes into consideration other revenue that we get. And so, some of our other revenue may be going down, and therefore it gives us a slightly higher rate,” she said. “So, the compensating rate is .362, the slightly higher rate is .395.”
However, Shack said the state also allows for increases greater than four percent if it’s necessary to keep the city’s revenue mostly stable from year to year, but only if a public hearing is held, which is the route Morehead has taken.
“Using their formula, with all of our income, all of our revenue, and the changes in the tax rolls, et cetera, it comes out to .41,” Shack said.
After explaining the reasoning behind the increases, city officials listened to the concerns brought by the hearing’s attendees, one of those being Jeanette Fannin.
Fannin said she lives outside Morehead’s city limits, but tax increases like the ones proposed affect everyone, even people like her.
“We buy food in the city, goods and services,” she said. “That costs everyone, and I’m not sure everybody understands that or is aware of that, but it costs us all.”
That notion caused a stir with several of the citizens in attendance, including Kally Barnett, a developer. She said even though she owns property in Morehead, she feels like she has less of a say in matters like tax increases because her home address falls outside of city limits.
“I pay so much in taxes to the city for zero say. And I can’t even continue to bring brand-new housing into our city – nice, luxury housing into our city,” Barnett said. “I can’t even do that because of things like this.”
Even though many members of the community are concerned about the increase in taxes, Mayor Laura White-Brown said if they aren’t raised, it would mean a reduction in the services that the City of Morehead is able to provide. Those services include those provided by the Parks and Recreation Department, properties leased by the city, like the Laughlin Health Building and a reduction of efficacy of both the police and fire departments in the city.
White-Brown said residents may be tempted to compare Morehead to other neighboring cities, the comparison they are making may not be quite correct.
“We may have higher tax rates than other counties, but we actually are one of the counties that have the least amount of various taxes in the state,” she said. “So while other cities and communities have different services, they may have a tax to back that up, and we do not. We’re paying for all of this out of our general fund.”
According to a state statute, all tax increases must become official before property bills are sent out at the end of October. As a result, city council will vote on the issue at their regular meeting on Monday, October 9.