5 things to know about Murfreesboro's 35.8% property tax hike, trash fee increases

Correction: A previous version of this story incorrectly stated the city of Murfreesboro owned and sold the property on Medical Center Parkway where The Avenue Murfreesboro is located.

It took the Murfreesboro City Council over three hours to debate the new proposed 35.8% property tax increase and monthly trash fee hike of $2.50 Wednesday.

"I don’t want to diminish the quality of life in Murfreesboro," Councilman Eddie Smotherman said in calling for the increase to balance the budget.

Smotherman initially backed the 39% increase recommended by City Manager Craig Tindall before offering a compromise.

Wednesday's 5-1 vote had Mayor Shane McFarland, council members Eddie Smotherman, Kirt Wade, Bill Shacklett, and Ronnie Martin in favor, with Vice Mayor Madelyn Scales Harris against. Councilman Rick LaLance did not vote and left the meeting after three hours, citing a prior commitment.

More:How to calculate your property tax bill in Rutherford County

Harris said she wanted to reduce the tax hike even more because she was worried about quality of life for people unable to afford the cost of housing, including Middle Tennessee State University students.

"This tax increase is going to hurt them tremendously," Harris said. "We are leaving out our people who cannot afford it. When you do that, you are going to see more homeless. You are going to see more crime."

On Thursday's second and final reading, the council voted 6-1, with Harris ultimately voting in favor and La Lance opposing.

How we got here

When the city began its budget process in April, City Manager Craig Tindall told the council a tax increase would be needed. After discussions, Tindall recommended adding 37 cents to the city's existing property tax rate of nearly 95 cents per $100 of assessed value, an increase of 39%. 

During Wednesday's meeting, the council voted 5-1 to up the tax rate by 34 cents — nearly 36% — for a new rate of $1.2894. 

The city's new budget begins July 1, officials said. Additional revenues will help cover the rising costs of schools, parks, roads and other services for a city of 141,000-plus people. 

What a property tax increase means for tax bills

The city's median home appraisal value is $235,300, according to the Rutherford County Assessor's Office. The current annual property tax bill for a home of this value is $558, and the cost would climb to $758 if the council approves the recommended increase.

Other homeowners could see the following changes:

• Home valued at $150,000: $356 (current), $483 (proposed)
• Home valued at $275,000: $653 (current), $992 (proposed)
• Home valued at $350,000: $831 (current), $1,128 (proposed)
• Home valued at $450,000: $1,068 (current), $1,450 (proposed)

Why raise taxes now?

The city manager and council want to balance an initial $188.8 million budget with revenues rather than deplete reserves needed to help secure bonds to fund $737 million in capital projects plans within the next five years. The city has funded $338 million of these projects.

City officials have seen significant increases in project costs, such as $33 million to build and open Salem Elementary next month, compared to the $20 million used to open Overall Creek Elementary five years ago. Both campuses follow the same floor plan.

Murfreesboro leaders have improved employee pay and benefits for about 1,200 workers. When counting all budgets for schools, utilities and the government, the total budget is $647 million.

By late April, Mayor Shane McFarland expressed concerns about balancing the budget without major cuts. 

"Even eliminating entire aspects of city services would not accomplish a balanced budget unless the service involved a major aspect of the city’s current services, such as schools," McFarland said in a news release.

Reappraisals can affect tax rate 

Over the years, Murfreesboro's tax rate has decreased following rising reappraisals. The council chose to use the state-certified rate, thus keeping tax bills on average the same per home.  Appraisals can fluctuate, with some homes appraising for more money and others less.

The last time the city raised taxes was in 1998 when the council set the rate at $1.90, slightly above the state-certified rate of $1.86, a 2.2% increase. Then led by Mayor Richard Reeves and City Manager Roger Haley, Murfreesboro had about 59,000 residents.

Back then, the city was tasked with paying for Erma Siegel Elementary, making improvements to Cason Lane and preparing to build Patterson Park Community Center.

As Murfreesboro has grown, the city went from a rate of $2.30 in 1994, to $1.72 in 2002 to the current $0.9494 per $100 of assessed value.

Gateway land helped avoid tax hikes

The city's previous tax hike came prior to the thriving Gateway area existing.

In hopes of future economic development, the council bought 358 acres for $12.7 million in 1998 between Thompson Lane and the Stones River. Since then, the city has sold a vast majority of this land, including for St. Thomas Rutherford Hospital.

The city also spent $25 million to build Medical Center Parkway and another $3 million to connect it to Interstate 24. The investment has attracted multiple developments, including The Avenue Murfreesboro shopping center and the Embassy Suites & Conference Center.

Murfreesboro leaders do not expect to make much money on the remaining Gateway land. Sales taxes at retail stores are not as strong as they once were due to online shopping.

Trash fees going up

The council established a $5 monthly fee per residential trash can in January as a step toward funding increasing solid waste costs. Tindall had recommended that fee be doubled.

A unanimous council at Smotherman's urging voted on a compromise to up that fee to $7.50 per month instead of $10 starting in July at Wednesday's meeting.

The city dumps trash for free at Middle Point Landfill, which is expected to close within a decade. City officials say they want solid waste to be treated like a utility.

Taxes on the rise in Murfreesboro:Proposed tax and trash fee hikes combined will exceed 50% for most in Murfreesboro

Taxes and trash:Proposed property taxes, trash fees in Murfreesboro to increase

Murfreesboro's property tax rate over the years

Murfreesboro city officials have stuck with the state-certified property tax rate since 1998.

1994: $2.28

1995: $2.28

1996: $2.26

1997: $2.26

1998: $1.90

2002: $1.72

2006: $1.407

2010: $1.2703

2014: $1.2066

2018: .9494

How does the proposed property tax and trash fee hikes affect your family budget? Reach Scott Broden at [email protected] or 615-278-5158, and follow him on Twitter @ScottBroden.