The Solution

The solution to the problem is as simple as the calculation process itself:

1. Enact legislation that requires all jurisdictions with the authority to levy ad valorem taxes (cities, counties, consolidated city-county governments, schools) to adopt an actual, mathematically-derived millage rate each year;

2. Repeal Section 1 of the “Taxpayers’ Bill of Rights” which requires a rollback of the millage rate based upon certain increases in the tax digest, additional public hearings and publication of a “Notice of Property Tax Increase;”

3. Require the levying authority to advertise the adoption of the millage rate. The publication shall include the two component figures of the rate setting process (budget and tax digest) and the proposed millage rate. Publication should be done in a manner no less stringent than current public notice requirements other than what is described in Section 1 of the “TBoR”;

4. Make it more difficult, legislatively, to create exemptions to taxation.  Repeal all “across the board” exemptions (the Value Offset Exemption, for example).

Additionally, we recommend and seek the following:

1. Require the levying or recommending authority to conduct a mid-fiscal year budget review, prior to the adoption of the millage rate, during which the budget is adjusted to reflect actual expenditures and revenues to date;

2. Require additional public notice, hearings and other opportunities for public input during the budget-setting process;

3. Provide that non-compliance by the levying authority could result in the loss of revenue sharing funds and/or their salaries;

4. Incorporate training on the ad valorem tax process including the procedure for setting an actual millage rate into current training for newly-elected officials. Make in-service training available to incumbents.