Fore Note; Remember, both industries have requested and received large tax reductions from both Loudon City and Loudon County.
Industries continue taxation appeals, city considers tax increase
What is the value of local industry - to the local economy, to government entities or to its owners/stockholders?
Two major Loudon County industries are seeking to reduce further the amount of property tax paid to local governments, causing the city of Loudon to look at a tax increase, to continue services at the existing level.
This year, in the wake of a stifled and still-shaky economy, Loudon's top industries, Tate & Lyle and Kimberly-Clark, have received reductions in assessed valuation.
Both appealed their assessments to the Loudon County Board of Equalization, and their appraised values and assessments were reduced.
Property owners who believe that the classification or value assigned to his property by the assessor is incorrect has the right to appeal that assessment and be heard regarding their opinion of value.
If after discussing a complaint with the assessor, a property owner wishes to file a formal appeal, the County Board of Equalization is the next step in that process. The board consists of five property owners selected from different parts of the county to serve two-year terms.
Because of Lenoir City's population, Tennessee law requires one member of the Equalization Board to be a Lenoir City resident appointed by the city council.
The County Board of Equalization met the first week of June. The board heard appeals from 90-plus property owners who disagreed with the assessment, classification or valuation of property for tax purposes.
Lynn Mills, Loudon city manager, said the reduction given Tate & Lyle and Kimberly-Clark by the equalization board amounted to 17 percent in appraised value - about an $80,000 reduction in property tax revenues to fund the city's budget. That amount, while sizable, could be covered by reductions in spending, Mills said.
Originally the budget had included 2 percent raises for city employees; the amount was reduced to 1 percent as a result of the LUB union contract negotiation, Mills said. The other savings was the result of a police officer position being freed because of a drug task force position funded by the Ninth Judicial District.
But both have appealed the assessed value, seeking further reductions.
In 2010, Tate & Lyle's assessed valuation was at $72.963 million. The Board of Equalization reduced the appraisal to about $60.280 million. The industry seeks further reductions, to less than $30 million.
Kimberly-Clark Corporation's Loudon plant was appraised a year ago at $50.453 million, and the Equalization Board reduced the amount to $43.517 million. The corporation seeks an appraisal of $20.181 million.
Both industries sought reductions because of land improvements, for which they already received tax abatements, officials said.
Assessed value of industries is 40 percent of the appraised value. The assessed valuation is the amount upon which taxes are based.
Should the two industries be successful in lowering their assessments to the asking amount, the impact to the city of Loudon would be significant.
Mills said the city stands to lose about $172,000 if the two industries were completely successful. For planning purposes, the city "split the difference," and will look at increasing taxes enough to cover about half that amount. The remainder will be recouped with budget cuts, or it will cut into the fund balance.
"We need to settle this soon, if we have to take it on the chin and adopt a budget, then take the revenues decrease out of the fund by whatever they get from the state," Mills said. "We could end up $90,000 in the hole."
Mayor Judy Keller said some state requirements, unfunded mandates, are coming that will put the city in a tight spot if budget reductions are necessary.
"We can only deal with the situation we have now" Keller said. "There's no other option here."
Tax assessments appealed to state
Tate & Lyle and Kimberly-Clark have appealed their tax assessments to the state equalization board, but the outcome and impact could be unknown for some time.
"With the uncertainty of it, we don't know how it's going to affect us," said Lynn Mills, Loudon city manager, when asked about how it will impact city coffers.
Tom Fleming, who serves as assistant to the comptroller for property assessment in the Tennessee Comptroller of the Treasury's office, said Friday the appeal is a lengthy process, "but it's for the protection of the taxpayer."
"It could be as much as a year or so, because of the process and the timing of things," Fleming said.
Chris Olsen, vice president for community and government affairs at Tate & Lyle, said the decision to appeal the company's assessment was made as part of an ongoing evaluation of business costs.
"We are trying to make sure that we have a good balance between supporting government services with our needs to be competitive," Olsen said.
A spokesman for Kimberly-Clark said the company is involved in an ongoing effort to review tax appraisals "throughout all our properties in the U.S."
"We believe in paying our appropriate share of taxes," said Bob Brand, external communications director for Kimberly-Clark. "We want to make sure the amount we're paying is the fair amount."
Information from the tax assessor's office was not available. The office was closed Thursday and Friday due to the death of Property Tax Assessor Chuck Jenkins.