Property owners in Tullahoma will have a lower tax rate for the next fiscal year.
The Tullahoma Board of Mayor and Aldermen unanimously passed a new budget and property tax rate July 9 after the budget’s third and final reading, following a two-week continuing resolution (CR).
During the two-week CR, the city continued to operate on FY18 funding levels, with no new capital projects or personnel additions occurring during this time.
The CR was required after the certified tax rates for both Coffee and Franklin counties were delayed from the state, according to Tullahoma Finance Director Sue Wilson.
“Changes in the state’s agreements made it more difficult to reconcile changes than in some of the past years,” Wilson told The News after the CR was passed. “Several drafts exchanged hands before the final version was received from the state on June 25, which was then reviewed against database information provided by both Coffee and Franklin counties, and finalized on the 26th.”
The CR allowed the finance office time to determine the correct certified tax rate and “calculate the amount of the tax revenue that it would generate towards the FY19 budget,” Wilson added.
The new property tax rate for Tullahoma residences will be $2.4305 per $100 of assessed valuation, according to the budget documents. This rate applies to properties within the Tullahoma city limits in both Coffee and Franklin counties.
During the previous fiscal year, the City of Tullahoma-Coffee County tax rate was $2.5975 per $100 of assessed valuation. The City of Tullahoma-Franklin County rate was $2.4360 per $100 last year.
Homeowners in Tennessee are taxed on 25 percent of their home’s appraised value.
The owner of a $100,000 home in Tullahoma, then, would then pay $607.63 in city property taxes. This rate does not include the county tax rate.
Lower rate, less revenue
According to a memo on budget from Wilson, the projected forecast of property tax revenue was lower than anticipated, meaning the city will receive $119,479 less in property taxes this year.
In order to balance the budget, the memo states, the city needed to pull from its reserve funds for “one-time items” as well as reduce spending.
The memo states the city pulled $68,479 from its reserve fund and cut and extra $20,688 in “bottom line” expenses.
Additionally, the city utilized $30,312 from “other revenue sources” in order to offset the property tax reduction.
Between the “other revenue sources,” the pull from reserves and the spending cuts, the city now has a balanced budget without raising taxes.
The News reached out to Wilson for detail on those “other revenue sources,” but answers were not available by press time.
Erin McCullough may be reached vie email at email@example.com.