Lebanon residents will likely face a property tax increase this year as the Lebanon City Council ended its budget work sessions discussing a proposed increase.
The proposed increase would raise the city’s property tax rate from 60.75 cents to 85.75 cents per $100 of assessed value (25 percent of property value for residential properties). For a home assessed at $150,000, the annual tax would increase about $100.
The council dropped a previously discussed sanitation fee, but included a 2 percent raise for employees in the proposal.
The agenda for the council’s June 18 regular meeting includes an item to discuss the overall budget.
Lebanon Mayor Bernie Ash specifically attributed the potential increase to population growth in Lebanon, which, along with Mt. Juliet and Watertown, made Wilson County the fastest-growing county in the state last year.
The council had previously discussed a 12-cent raise that would cover the need for additional police officers and firefighters, a $6 million radio system for the Lebanon Police Department and other public service needs. The proposed increase would bring in about $1.75 million.
Lebanon Finance Director Stuart Lawson said last month the 12-cent increase would cover the city for the next fiscal year, but would likely need to be revisited next year. He attributed the need for the increase to slow growth in revenue in other areas of the city’s budget, including sales tax.
“We’re not seeing those huge jumps anymore,” Lawson said.
Wilson County voters rejected a half-cent sales tax increase last year via special referendum. The increase was estimated to bring in about $11.1 million for Wilson County, with Lebanon estimated to receive about $2.7 million annually.
Lawson said the city was lucky it did not have a health insurance coverage cost increase for its employees this year, which he said he couldn’t guarantee would happen again next year.
Ash said the city has not raised its property tax rate since 2013, and has added several additional personnel due to population growth. Most recently, the city added a dozen firefighters and several police officers.
“They didn’t all go on the budget at the same time. This year, they all will go on at the same time. That’s our biggest expense — personnel,” Ash said.
In 2016, the city estimated the cost for a new certified police officer, including salary and benefits, was about $65,000. The same year, the council voted to leave the city’s tax rate at 60.75 cents, which caused an increase in residential and commercial property tax payments with an increase in property values through reappraisal.
The average Lebanon resident paid an additional $40 because of the decision.
The city voted last year to increase building impact fees for multi-family homes, but Lawson said many developers pulled permits and other related materials prior to the council vote in anticipation of the change.
Some councilors have also been hesitant to place high emphasis on impact fees and related fees because of the belief the growth in the city would eventually stall.