Taxes are likely going up for over 100,000 Lexington property owners. Here are the details
Over 100,000 Lexington homeowners and business owners who pay for street lights will likely see that portion of their property tax bill increase come January.
During a Tuesday Lexington-Fayette Urban County Council work session, the council voted 11-4 to up the property tax for street lights to make up for a $2 million shortfall annually for more than a decade.
For an average home with an assessed value of $235,000, the increase will go from $47 to $63.45, or a roughly 35% increase. Other city services such as street cleaning and garbage pick up will remain the same.
Tuesday was the first vote on property taxes. Council is expected to take a final vote on Aug. 31. A first reading of the ordinance setting property taxes is set for Thursday.
Not all property owners pay for street lights. Only homeowners in certain taxing districts will see their portion of Fayette County property tax bills go up.
According to city records, the increase will effect 100,230 parcels or property owners.
The city last increased street light taxes in 2019 but the average increase was less than 50 cents.
The city has been subsidizing the street light fund using general fund revenues rather than relying on money generated from the street light tax, Lexington Budget Director Melissa Lueker told the council Tuesday.
Several council members said they did not want to raise property taxes for street lights.
Those who voted against the increase for street lights include Tayna Fogle, Preston Worley, Chuck Ellinger and Fred Brown.
Others said the city has used taxes generated from the general fund, which everyone pays, to subsidize the cost of street lights, which not all property owners pay.
Lexington Mayor Linda Gorton, who spent more than 16 years on council prior to becoming mayor in 2020, said the tax for street lights has never paid for the cost of for the lights. Moreover, the cost for street light poles, which are provided by Kentucky Utilities, has continued to go up.
The city’s general fund portion of property taxes — which pays for all other city services such as personnel, police, fire and paving —will remain largely the same. The tax rate will go down but because property values have increased, the amount property owners will pay will remain about the same.
The bulk of homeowners’ property tax bill — 64.8% — goes to the Fayette County Public School system. Only 6.1% goes to the merged government. A sizable chunk of the city and county’s portion of that property tax — more than $21 million — goes to the Lexington Public Library.
The state receives 9% of a homeowner’s property tax.
Property tax bills are sent in the fall but are due in January.
