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A Tax Explanation

 

Just a word or two here to help with some of the confusion that may be present if budget deliberations in this unique budget season are new to you as a reader.

Much of what is happening is new to even veterans of the process on the city council and county commission and the mayor’s offices on both sides of the Main Street Mall.

Much of the discussion so far and to come in the next two weeks on the city government side of this is about when to take certain measures.

Should they be for the fiscal year that starts July 1 or a later fiscal year.

If you are among those listening on line to the council or commission budget deliberations you will hear lots of references to fiscal year ’14 or fiscal year ’15 when the ideas being discussed start to move in that direction.

Fiscal year ’14 is the one that begins this July 1. A handy rule of reference is that the fiscal year in city and county government always takes the year number that it ends in.

Whenever possible, however, we talk about the fiscal year that begins July 1 and if it is a later year we will refer to it as the fiscal year that begins July 1 with the appropriate year.

No sense making this harder to follow than it already is.

On the other hand, you have probably noticed that we are making a distinction between proposed increases in the city and county property tax rates and proposed tax increases.

We are also explaining that increases in the tax rate are what it is estimated it will take to produce the same amount of revenue either government gets, taking into account property value lost with the 2013 property reappraisal.

The tax increases are increases taxpayers will pay beyond the adjustment in the rate to generate the same amount of revenue each government gets from its respective recertified tax rate. The rate is certified by the state of Tennessee which signs off on the calculations.

As with many of the revenue and expense projections during the budget season, these estimates are attempts to hit a moving target.

The Luttrell and Wharton administrations each had higher certified rates – higher by about three cents – than the rates they settled on in their final presentations to the city council and county commission.

So, at about this time next year we will also be reporting on whether the recertified rate did indeed produce just the amount of revenue each government got the fiscal year before, which would be fiscal year 2013, which comes to an end June 30.

 

 

Dansette

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