Florence finance director proposes 3% reduction in 2025 property tax rates; public hearing set for Sept. 3

Jason Lewis, Florence’s finance director, told the City Council caucus that staff is proposing a 3% reduction in the city’s real- and tangible-property tax rates for tax year 2025 and recommended the council hold a public hearing before adopting final rates.

The proposal would lower the city’s projected property-tax revenue for fiscal year 2025–26 to about $10.1 million, Lewis said, and “on average, real estate tax bills would decrease around $25 per bill.” He told council the 3% reduction is intended to keep revenue growth “slow but manageable” given recent assessment changes.

Why it matters: Florence publishes the maximum rates required by Kentucky law but may set rates below those maximums. Lewis said Boone County’s assessments for 2025 showed about 3% growth in real-property assessments, while tangible (business) assessments fell sharply — goods stored in public warehouses, which make up roughly half of the city’s tangible base, declined about 30% versus last year. Those changes drive the city’s allowable maximums and the staff proposal.

Lewis summarized the legal and numerical framework behind the proposal. He cited KRS 78.530(3) as authorizing a special assessment to fund hazardous-duty retirement service costs and said the statutory maximum for that special hazardous-duty assessment is $1.47 per $1,000 of assessed value. Based on Boone County’s assessment rolls, he reported the statutory maximums published in the city’s legal ad as: $1.87 per $1,000 for real property and $2.39 per $1,000 for tangible property.

To reach the 3% reduction, Lewis said the city would apply a special assessment of $0.44 per $1,000 so the combined real-property total would be $2.31 per $1,000 (compared with $2.38 last year). Because tangible assessments declined, Lewis explained, the maximum allowable tangible rate moves inversely and the total rate shown for tangible property in staff scenarios is higher than last year even though assessed values fell.

Lewis warned that tangible-property valuations can move year to year because much of the base is self-reported business inventory and warehouse-stored goods. He said revenue scenarios show roughly $100,000 in city revenue change for each percentage-point change in the tax rate, and that for residents each 1% rate decrease reduces an average bill by about $10–$15.

Council questions focused on what is included in the tangible base and the reliability of those numbers. Councilmember Whalen asked for clarification of tangible-property components; Lewis listed merchandise inventory, manufacturers’ finished goods, goods stored in public warehouses (the largest component), charter aircraft and certain registered watercraft, and construction work in progress.

Council next steps: the mayor announced a public hearing on the proposed 2025 tax rates to be held Wednesday, Sept. 3, at 4:30 p.m. in the council chambers at the Florence Government Center, and invited written comments to the city clerk by email or phone if residents cannot attend in person. The council will consider the public input and the financial projections before setting final rates, which may be lower than the published maximums.

Background and context: Lewis noted that the city’s long-term compound annual growth in property-tax revenue since 2017 has been about 3% and that staff used that historical average when modeling scenarios for revenue stability.

A city-advertised table and staff memo with multiple rate scenarios were included in council packets for further review ahead of the hearing.