City Property Tax FAQ

The compensating rate is calculated using the DLG formula that the State provides, and it should bring in approximately the same amount of anticipated revenue as last year. A rate of any less than the compensating rate could place us in a deficit. The compensating rate set forth in the first reading is about twenty percent less than last year’s rate. This was possible since real property in the city was reassessed.

The proposed compensating rate is lower than last year’s rate, and it does not result in more revenue than the city anticipated last year. Balanced Carried Forward Funds are not profits or leftover money. These funds are budgeted for the current fiscal year’s expenses as well as future obligations.

For more details, please read the Property Tax FAQ that follows.

1. How are property tax rates calculated? The rates are calculated using the Kentucky Department of Local Government (DLG) workbook. This workbook follows Kentucky statute KRS 132.010(6), which directs that the “compensating rate” can never generate revenue less than the revenue anticipated in the previous year.

2. Who proposes and votes on the property tax rates for the City of Morehead? The City Council of the City of Morehead proposes and votes on the property tax rates. The Mayor only votes on property tax rates if there is a tie when the Council votes. There was not a tie on the vote of the first reading at the September 8, 2025 meeting of the Council.

3. What is the real property tax rate for the City of Morehead proposed by the 1st reading and voted on at the September 8, 2025 City Council meeting? The rate proposed is .363 or 36.3 cents per $100 of assessed property value. This is the “compensating rate”, as defined in KRS 132.010(6). The vote was 4-2 in support of the compensating rate (.363).

4. What was the previous real property tax rate for the City of Morehead (the rate your bill was based on in 2024)? In 2024, the rate was .452 or 45.2 cents per $100 of assessed property value.

5. Is the proposed real property tax rate greater or less than last year’s rate for the City of Morehead? Less. In fact, the proposed rate is 8.9 cents lower per $100 of assessed property value. That is, the proposed rate is 19.7% less than last year’s rate.

6. Is there another type of property tax? Yes, there is also personal/tangible property tax collected on tangible business properties, such as equipment. The value of personal/tangible property is self-reported by the business owner or their accountant using the appropriate form. If you are a businessperson and have questions, please contact the PVA for more information about reporting personal/tangible property.

7. What is the personal/tangible property tax rate for the City of Morehead proposed by the 1st reading at the September 8, 2025 City Council meeting? The rate proposed is .6947 or 69.47 cents per $100 of property value as reported by the owner of the tangible property. This is also a lower rate in comparison to the 2024 personal/tangible property rate of .7301 or 73.01 cents per $100 of property value.

8. How is the personal/tangible property tax rate determined? This rate is also calculated using the DLG workbook. The workbook calculates a tangible rate corresponding with the compensating rate that will lead to revenue at least equal to last year’s anticipated revenue.

9. What was the anticipated property tax revenue last year for the City of Morehead from both real and personal/tangible 2024 property taxes? $2,040,834

10.What is the anticipated property tax revenue this year for the City of Morehead from all property taxes using the proposed compensating rate (36.3 cents per $100 value) and its corresponding personal/tangible rate (.6947 per $100 value)? $2,041,923

11.What is the difference between last year’s and this year’s anticipated revenue for the City of Morehead? $1,089

12. What variables affect what the City of Morehead will collect from property taxes? Variables that affect what the city will collect from property taxes include: (1) some bills are never paid; (2) some bills are paid late; and (3) some bills receive an early payment discount.

13.How is my property assessed? The Rowan County Property Valuation Administrator (PVA) assesses your property using methods recognized by Kentucky law (KRS 132.191). The methods most commonly used by the PVA result in an estimate of the fair cash value of your property. The goal is for assessments to be 100% of fair cash value (what a property would sell for in an arms-length sale). The PVA reassesses one quadrant per year, cycling through the four quadrants over four years. In 2025, the quadrant reassessment included the entire city. This was the first full reassessment of this quadrant since 2016. In 2020, the reassessment of the city was affected by the pandemic.

14.What does the proposed rate of 36.3 cents per $100 of assessed property value mean for my payment in 2025? Each property will be different. Here are some examples to illustrate: If your property assessment is $100,000 your payment will be $363; if your property assessment is $80,000, your payment will be $290.40; if your property assessment is $200,000 your payment will be $726. Keep in mind that if you pay late, there is a late fee added to your payment. If you pay early, you receive a discount.

15.What is a Balance Carried Forward? Balance Carried Forward are funds that are fully committed within the City’s operating budget. Along with anticipated revenues, these are funds used to maintain the services the City provides, as reflected in the Appropriations section of the budget. In some cases, these are funds that are committed to a long-term project from a previous year (such as a multi-year grant) that cannot be cleared from the Balance Carried Forward until the grant project is complete and fully paid. In those instances, these funds are part of the Balance Carried Forward and can only be used for the specific grant purpose.