CLARKSVILLE, TN (CLARKSVILLE NOW) – The City Council held a special session meeting Thursday to adopt the operating and capital budgets for fiscal year 2024-25, which included increasing the property tax from the certified rate to $0.88 per $100 of assessed value.

Earlier in the week, the certified tax rate was set for the city at $0.7488. That’s a reduction from the previous rate of $1.23. It came after the five-year revaluation showed property values across Montgomery County increased by 65%. The certified tax rate is intended to keep tax revenue neutral before and after revaluation.

However, after making more than $9 million in budget cuts, City Chief Financial Officer Laurie Matta said they had no choice but to reject the $0.7488 certified rate and increase it to $0.88.

“We did many budget cuts,” Matta said. “We had to look at that balancing act that I talk about so often, of what is needed and what do we have the money to pay for and to provide those services that citizens want and are willing to pay for.

“So, when we got down to bare bones, and we knew there was nothing else we could cut without cutting services, that’s when the tough decision had to be made. It had to be made at that point, and we decided to increase the tax rate.”

Matta added that she backed into the revenue that she budgeted for and figured out what tax rate was needed, so that exact number is almost perfect to the municipal penny, which is how she  landed at $0.88.

Matta also said the certified tax rate process causes other issues.

“I brought it to the state’s attention. I brought it to the (property) assessor’s attention. Nobody has disputed what I’ve said. They all agree with it, and they said, ‘Yes you actually do lose money in the certified tax rate process.’ And their fix is do not accept the certified tax rate, which I don’t agree with, and I’ve said that before.”

Matta showed an example of what happened in tax year 2019 when the city accepted the certified tax rate and lost around $1.5 million from the revaluation process.

Tax impact to homeowners

Based off the summary assessment Matta received, the average home in Clarksville is appraised at $266,021.

If the city had approved the certified tax rate, the annual taxes for an average home in Clarksville would have been $498 per year, according to Matta. However, with the approval of the $0.88 tax rate, the average tax bill is expected to be $585, a difference of $87 a year, or $7.25 a month.

“For each penny we increased our taxes, it cost the average homeowner $6.65 a year or $0.55 a month,” Matta said. “And I’m not trying to minimize the tax increase, because I promise you it’s not something the mayor (Joe Pitts) or I take lightly. But it looks like a pretty good return on investment to pay for one penny $6.65, and for 13 pennies to pay $90 and get $8 million worth of services.”

While some council members objected to the $0.88 tax rate, the budgets for fiscal year 2024-25 were approved 7-5. Voting yes were council members Brian Zacharias, Deanna McLaughlin, Ambar Marquis, Stacey Streetman, Joe Shakeenab, Keri Lovato and Mayor Joe Pitts. Voting no were Wallace Redd, Wanda Smith, Travis Holleman, Wanda Allen and Karen Reynolds. Dajuan Little was absent.

The city will take the second and final vote in a special session on Tuesday, June 25, at 4:30 p.m. in Council Chambers, 106 Public Square.

The Montgomery County Commission will go through a similar process with its certified tax rate of $1.832 (down from $2.99). Their next meeting is Monday, July 1, at 6 p.m. at the County Courthouse.

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