BENTON -- Benton property owners are getting a tax cut in 2017.
The City Council passed a 0.4-mill decrease in the city's personal and real property millage rates by a unanimous vote Monday evening. The millage drop will appear on tax bills in 2017.
"The citizens of this community supported with votes the things we've asked them to do," Benton Mayor David Mattingly said. "To turn around and say 'thank you' and give some back, I think is not only appropriate but it's what we said we'd do."
A county assesses property at 20 percent of its appraised value. A mill is one tenth of a cent, with each mill producing $1 in tax revenue for every $1,000 of valuation.
For a homeowner with a $100,000 house, the drop in the real property millage rate from 4.5 mills to 4.1 mills means a $8 decrease in taxes -- from $90 to $82.
For the owner of a vehicle with an appraised value of $20,000, the drop in the personal property millage rate from 4.5 mills to 4.1 mills means a decrease in personal property taxes from $18 to $16.40.
The millage drop will reduce city revenue by about $171,000. The drop in the city's millage rate won't affect taxes collected by the Benton School District.
The tax cut is possible because of the city's growth and financial stability. According to the U.S. Census Bureau, the population of Benton was about 22,000 in 2000. In 2013, an estimated 33,155 people lived in the city.
The population boom has meant an increase in Benton's tax intake. Between 2002 and 2013, property taxes collected by the city increased from about $886,000 to $1.76 million.
The new millage rates also mean re-configuring how mills are allocated. At the 4.5 mills rate, 4.1 mills go to the general fund and 0.4 mill is dedicated to a pension fund for 33 firefighters -- but only two of whom are currently employed.
The new millage rates will have 3.2 mills going to the general fund and 0.9 mill going into the old fire pension fund. The change will make the old pension fund solvent, with the natural growth of city assessments keeping it that way.
The city's current fire pension fund and other city pension funds are fine, Mattingly said.
Mattingly also said he is moving forward with support for a constitutional amendment that would allow municipalities to set different personal-property and real-property tax millage rates.
Setting a personal property millage rate differently than a real property millage would require changing Amendment 79, which says in part that the "millage rate levied against taxable personal property ... shall be equal to the millage rate levied against real property."
Mattingly is working with Rep. Kim Hammer, R-Benton, to push for changing the amendment.
State Desk on 08/11/2015