Council keeps ad valorem tax rates the same

Councilmembers Kathy Plomin, James Brown, and Vice Mayor Dan Wu in the May 28th, 2024 Budget Committee of the Whole Meeting. Source: LexTV

In last Tuesday’s Council Work Session, Council voted to follow the Mayor’s recommendations and keep the ad valorem tax rates for Fiscal Year 2025 (FY25) the same as FY24.

Ad valorem taxes are property taxes assessed on assets like homes and real estate, machinery, motor vehicles, boats, personal planes, or agricultural products. The City of Lexington collects ad valorem taxes that go into two different funds:

• The General Services Fund, which can be used on most City expenses;

• and the Urban Services Fund, which specifically funds street lights, refuse collection (trash and recycling), and street sweeping.

Council was presented with three rate options for the General Services Fund, and four options for the Urban Services Fund. Council chose option 1 for each, keeping the rates the same.

• A tax bill for a $250,000 house in Lexington would require a $190 payment toward the General Fund under current rates.

• A tax bill for that same house in Lexington would require a $437.50 payment toward the Urban Services Fund, if that house received street cleaning, trash collection, and had street lights.

Keeping the tax rates the same will bring in more revenue than the Administration had initially budgeted for the FY25 City Budget.

• The General Fund will get an additional $783,520 in revenue.

• The Urban Services Fund will get an additional $951,160 in revenue.

The increase in revenue, despite an unchanged tax rate, comes from increased property values, as well as newly developed properties that are entering new tax districts as they are completed.

Council will hold a public hearing over the tax rates on Tuesday, September 3rd at 1pm in Council Chambers. Their final vote of approval for the ad valorem tax rates will be at that same September 3rd meeting.