As a result of the recently completed Hamblen County property reappraisal, the property-tax rate inside the Morristown city limits will fall by about 10 cents per $100 of assessed value, but that does not mean all will be paying less tax, officials say.
The Morristown City Council on Tuesday gave its initial approval to the new $1.3958 rate. The current tax rate, which will change when councilmembers vote again on July 21, is $1.50 per $100 of assessed value.
Over the last five years, property values inside the city limits have risen by 9%. State law provides that counties and municipalities cannot increase revenues as a result of a reappraisal. To level the field, city government must decrease its rate by 9%.
Hamblen County government will cut its tax rate by an identical percentage in the coming weeks, but it won’t be an apples-to-apples decrease because Hamblen County Commission members are considering a 3-cent property-tax increase to fund operations for the new Hamblen County Jail.
Morristown property owners also pay Hamblen County property tax. The rate for property inside the city limits is $1.90 per $100 of assessed value. The rate for property in Hamblen County outside the city limits is $2.13. County property owners pay an extra 23 cents for garbage pickup.
Keith Ely, Hamblen County property assessor, said this morning the primary driver in the increase in property values is in the residential sector, mainly in houses valued between $130,000 and $220,000.
Ely says homes in this price category rose about 15%. These homeowners will pay about 15% more city property tax, but have the assurance the investment in their homes is paying large dividends.
Another factor in the increase in home values in this price range is that all the homes built in the last five years are coming on the tax rolls at their fair market value, not what they were worth five years ago when the last reappraisal occurred, according to Joey Barnard, assistant city administrator.
Ely says that over the past five years, the values of commercial and industrial property have essentially remained flat. Commercial and industrial property is more important for city and county governments because they’re taxed based on 40 percent of the value. Homes are taxed based on 25 percent of their value.
The new property valuations will be reflected on the 2020 tax bills. The Morristown City Council recently voted to adopt county government’s property-tax schedule. Tax notices for both city and county property owners will be mailed in October and payment will be due in December.