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Comparing property tax rates

Today’s morning newspapers both had articles (Oak Ridger: 13-cent tax hike projected and News Sentinel: Stagnant development behind OR tax increase) describing Steve Jenkins’ presentation at yesterday’s meeting of the City Council Budget and Finance committee, and both reported (based on a table included in Steve’s handouts) that Oak Ridge has the 4th highest property tax of Tennessee’s cities, “trailing only Memphis, Humboldt and Knoxville.”

There’s no denying that Oak Ridge’s property taxes are high in comparison with most other places in Tennessee, but it seems to me that that comparative ranking of property taxes levied by municipalities is misleading. Because of differences in which unit of local government provides various services, a comparison of local property taxes is not meaningful unless it also includes the property taxes paid to counties, as well as to special school districts where those exist. Comparing tax rates in municipalities that operate school systems and police departments (to name just two areas where municipalities differ) with tax rates in municipalities that leave these services to the county is not like comparing apples and oranges — it’s like comparing the cost of a full-course meal at one restaurant with the price of the main course (or even just the appetizer) at another eatery.

When total local property tax burdens are compared, it turns out that Oak Ridge has more company near the high end of the list, and the smallish West Tennessee city of Humboldt drops even farther down the list. According to the state comptroller’s office, the cities and towns in Tennessee with the highest combined local property tax rates (equal to or greater than the rates paid by Oak Ridgers) are as follows:

  • Memphis (Shelby County) – $7.4732
  • Bartlett (Shelby County) – $5.63
  • Germantown (Shelby County) – $5.63
  • Knoxville (Knox County) – $5.50
  • Collierville (Shelby County) – $5.37
  • Chattanooga (Hamilton County) – $5.356
  • Oak Ridge (Anderson County) – $5.33
  • Millington (Shelby County) – $5.32
  • Humboldt (the portion in Madison County) – $5.30 (most of the city is in Gibson County where the combined tax rate is $3.78)
  • Arlington (Shelby County) – $5.09
  • Oakdale (Morgan County) – $4.98
  • Lookout Mountain (Hamilton County) – $4.954
  • Henning (Lauderdale County) – $4.95
  • Bristol (Sullivan County) – $4.95
  • Signal Mountain (Hamilton County) – $4.929
  • Oak Ridge (Roane County) – $4.92

Viewed that way, it seems that Oak Ridge has more company than those newspaper articles suggested.

Note that this is not a comparison of total local tax burden. Notably, it does not include local sales tax (which is at its highest possible rate in both Anderson and Roane counties) or the wheel taxes that are levied in many Tennessee counties (not including Anderson and Roane). For example, without the $55 wheel tax in Metro Nashville Davidson County, Nashville’s total property tax rate likely would be a good bit higher than its current value of $4.69.

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12 Comments

  1. Phil says:

    Thanks for the rankings, Ellen. At the rate of increase predicted over the next few years, Oak Ridge should easily jump to number two. No glory in winning the silver medal in this race.

    We all know what will help, that evil word “retail.” Without infringing on neighborhoods, there seems little in the future that can help defray the cost to homewoners.

    The aging demographics, easy access to Knoxville, and the lack of population growth are all impediments to increasing the sales tax base.

    I hope the visioning process is for real. The future of meetings after meetings feels like an impending impass in the making. I want it to work, but I don’t feel real hopeful about it.

  2. Ray Kircher says:

    The information is slow to get out, but taxation is what our city runs on. I have to disagree that retail is a “fix.” If it were, Oak Ridge would be a booming city due to the convenience of Turkey Creek and two Interstates, yet our population growth is stagnant. I have to take a stand that fiscal responsibility with our taxes takes the Gold Medal to what will fix our distracting disgust. Oak Ridgers are not the only people who see the money given away. The ones who are looking for a place to call home with well-maintained streets, great schools, and safety already in place see that we have not invested in our self.

    I have to say the biggest investment Oak Ridge can find today is to stop handing money away to under performing groups. It isn’t that our tax receipts are low; rather it is our tax leakage from within city council.

    Really, just how large of a crowd can be expected to gather anywhere in Oak Ridge?

  3. Phil says:

    Ray,

    I didn’t say retail was a “fix,” if you were referring to my comments. It would help if we could increase the tax base from that source.

    I think we agree on pretty much everything else in your post, but I guess I don’t know to what under performing groups you were referring. I think developers are in there somewhere, though. I’m not going to put you on the spot to spell it out for me, but there’s fat to be cut in any government.

    It’s good to have a dialogue going.

    Best wishes Ray,

    Phil

  4. CrackerNation says:

    Phil,
    While our property taxes are projected to increase, since that rate is less than the cost of living, and others who can rely on sales taxes are facing a recession in which their sales receipts may well drop, I suspect that we will not move up in the rankings.

    People moving here from out-of-state don’t think our property taxes are particularly high anyway. But diversifying our revenue streams is a desirable goal in the same way that diversifying investments helps deal with financial uncertainty.

  5. Ray Kircher says:

    I can understand my mistake of putting words in your mouth Phil, but a meek city such as ours is fairly priced. Big cities do know retail is only for extra money, it will never pay the bills. That is what I believe, but somehow our city has future money to give away. That is fine, if our city wasn’t meek. CrackerNation tries to sugar coat a situation that is based on theory (his made up theory) “our city is in danger if we do not get retail.” May God Bless His Soul!!!

    We need to see there is money that must be put into our sewer, electric, basic safety, savings, and MOSTLY lack of and out-dated roads and civic buildings. Does the money really need to go into anything else for the next 4 years? And even if we wanted to halt some sour programs and projects of our city council, it would take years to get out from under it. I’m glad I see I’ve taken you wrong and you see it correctly; I thought you would go and say our city is broken.

  6. Ellen Smith says:

    Ray, I agree with you that retail isn’t the be-all and end-all, but “retail” is not a “dirty word.” Increased retail vitality would benefit Oak Ridge’s public finances, not only by increasing sales tax revenues, but also by making local retail property more valuable (thus increasing property tax revenues from retail property) and by making the city more attractive to prospective residents who are discouraged to see the amount of empty space in our city center. (Attracting residents should help by increasing our residential property values and by increasing the number of people who contribute to local sales tax revenues.)

  7. Ray Kircher says:

    But can you buy “retail” in Oak Ridge? I find that the push to spend is too hard when our citizens are not driven by the local industry. Many of us live here but work outside of Oak Ridge, which is why more residents are needed to move into Oak Ridge before paying developers a single penny can turn profitable for the city.

    I would say retail becomes dirty when projects like Flatwater Grill is pushed and turn dismal results but receives the same tax savings, as would’ve GBT. If the 6 million needed to turn Pine Ridge into a retail center was put into infrastructure, new roads, additional personnel to the city payroll, and an all-out better entrance to Oak Ridge than what was presented, I would have been able to live with the cost, but not the money for only a change in retail square footage. We are looking at changing our look, aren’t we?

    I feel the Chamber of Commerce has set a bad look for Oak Ridge with so many large payroll companies and very few family owned businesses enrolled. Can anyone feel how difficult it is to navigate Oak Ridge business? Now living here, I would think the $220,000 a year going to the chamber should be used to set up grants to improve locally owned stores as the Community Development Block Grants does to residential communities. Having the word out which Oak Ridge businesses are great is vital to new comers. As we have of it today, it is left up to the local newspapers. Is that in anyway to find the best companies in a city?

    To find out the value of a property outside of property taxes, LOL, ask Target? Those are business numbers. If our city manager and assistant were to know what is really available in “retail” for Oak Ridge, I don’t think they would be working for the City of Oak Ridge. They need to get back to citizens who can send the message; hey we have changed our direction, look at our masses, and look at us.

    Ellen, I appreciate pointing out retail as a dirty word. I do not think they are talking about the businesses, rather the transparency of what we get for our money. It could be people just have an inherited disposition to think of the council that way. That is just life as a politician, I believe. I wouldn’t take it anyway. Just send it away.

  8. Ray Kircher says:

    ORNL is marketing their innovative car research. Is there effort by ORNL to entice carmakers to open a branch of their manufacturing in Oak Ridge?

  9. CrackerNation says:

    Ellen you are right that retail is not a dirty word. Most of us who buy things know that. One other factor that you did not happen to mention is that all of our citizens need to buy things. When they purchase goods outside of our county, that loss of tax revenue that would have come to Oak Ridge must, on average, be made up somewhere else. In this state that means from property taxes or perhaps fees for services like some communities do more than we do.

    Without sufficient and varied local retail we are penalizing our citizens by increasing property taxes to compensate and forcing on them the ever increasing costs of travel to shopping. They pay us back by living elsewhere.

  10. CrackerNation says:

    Ray, the ORNL automotive effort is mainly focused on research facilities and perhaps some Headquarters/Administrative facilities that tend to co-locate with their research activities.

  11. Ray Kircher says:

    From what I have read on your comment to me CrackerNation is ORNL may be paying some Headquarter’s/Administrative’s facility to help move the technology along. I find that ORNL doesn’t care of such efforts to support business, look at our city? If you haven’t noticed your complaint about retail, may I help you. What industry is directly interested in Oak Ridge? That should keep our council busy.

  12. […] comment on Oak Ridge Today has inspired me to update the comparison of property tax rates that I made back in January 2008. Using data from the Tennessee Comptroller, I am pleased to find […]

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