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Glitch delays tax assessment

By Greg Bird

A computer glitch in the McCreary County Property Valuation Administrator’s Office has delayed finalization of the property tax assessment, which could delay the printing of tax bills for the year. Any delay could also impact local governments and special tax districts as they prepare to set their tax rates for the coming year.
Joni Carson, Chief Deputy PVA said this week that the glitch has prevented the office from finalizing the tangible property portion of the assessment, but all work has been completed.
She stated she hopes the issue will be resolved as soon as possible and the assessment could be finalized without much further delay.
Once the assessment is finalized it is sent to the State Department of Revenue, who then use the data to calculate suggested tax rates for government entities. The department typically submits at least two possible tax rates to governments and special taxing districts: a compensating rate, meaning the entity would generate close to the same revenue as the previous year, and a 4-percent rate, reflecting an increase of revenue by 4-percent over the previous year.
Typically the assessment is turned in by early August, giving the Revenue Cabinet time to calculate the suggested tax rates and return them to the relevant entities in time for them to determine their tax rate before the September Fiscal Court meeting where the rates are submitted.
But, with the delay in submitting the assessment, some taxing entities, such as the McCreary County School District may be in a bind when it comes to calculating their revenue.
The issue was addressed at last week’s meeting of the McCreary County Board of Education.
Finance Director Bill Boyd stated the District is preparing to finalize their budget for the school year, but without the assessment information, they are unsure of what tax revenue to expect for the year. Unlike the Fiscal Court, school district’s budgets are finalized in September.
Though revenue from the property taxes are only a small portion of the District’s overall budget, the lack of information may force them to submit a budget that may not accurately portray the tax revenue and would have to be amended once the assessment is finalized.
Cash said this week, that the District’s finance officers were working on finalizing the newest budget, but will have to do so without knowing what the tax rate will be.
Tuesday Superintendent Michael Cash said he has asked his staff to prepare the budget using an estimation of revenue based off previous years taxes.
Cash noted overall county assessments have risen the past couple years, allowing the Board to lower the tax rate for the school district, while still generating the same revenue as the year prior. He said he hoped to be able to do so again this year, but has no clue what the assessment will look like.
If the assessment rises again, the tax rate is likely to decrease. If the assessment lowers, the Board will most likely adopt a tax increase, but it will only raise enough to generate equivalent revenue.
McCreary County Judge Executive Doug Stephens said any delay in tax bills being issued could be an issue for the County and other taxing districts. While those entities would still receive the tax revenue, it may come at a later date, creating a potential cash flow problem for some of the entities.
Taxing districts, such as the fire departments and health district have their tax rates set at the maximum, so are unlikely to be affected by the delay other than when the funding arrives.

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