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As Barren County taxing districts consider their property tax rates for the coming year, some readers have asked a basic question: Why do we pay taxes on property we already own?

In Kentucky, property taxes are one way state and local governments raise money for public services, including county government, cities and schools.

The idea is also centuries old. According to the Tax Foundation, governments in ancient civilizations, medieval Europe and the American colonies used property taxes to raise revenue.

Kentucky inherited that tradition when it became a state in 1792. The current Kentucky Constitution, adopted in 1891, sets the basic rules for how property is assessed and taxed.

What does the Constitution say?

Kentucky’s Constitution establishes the basic framework for property taxation.

Section 172 says property that is not exempt from taxation must be assessed at its “fair cash value,” essentially, the price it would bring in a fair, voluntary sale.

Section 174 also provides that property is to be taxed according to its value.

That is why a property’s taxable value is not generally locked at whatever the owner originally paid for it. If a home’s value increases, its assessed value can increase even if the owner never sells the home.

Why can my tax bill go up if the rate doesn’t?

This distinction is important as taxing authorities such as Barren County consider their property tax rates for the coming year. The Barren County Fiscal Court is proposing to keep its rate at 12.2 cents per $100 of assessed value.

The tax rate and the property’s assessed value are two different things.

For example, a property assessed at $100,000 would generate $122 in Barren County taxes at a 12.2-cent rate.

If that property’s assessed value increased to $110,000, the county portion of the tax bill would increase to $134.20, even though the county never changed its 12.2-cent rate.

And the county portion is only part of the bill. School districts, cities and other taxing districts can also levy property taxes.

Why isn't my property value just what I paid for it?

Because Kentucky’s system is based on value, not the owner’s purchase price.

Imagine two neighbors with nearly identical houses. One bought his house 20 years ago for $75,000. The other bought hers last year for $250,000.

If the properties are now worth roughly the same amount, using the original purchase price as the tax basis could result in dramatically different assessments simply because the homes were purchased at different times.

Kentucky’s Constitution instead directs assessors to determine fair cash value.

That doesn’t mean every assessment is necessarily correct. Kentucky has a process for property owners to challenge an assessment if they believe it is higher than the property’s fair cash value.

Who decides what my property is worth?

In Kentucky, the property valuation administrator, or PVA, is responsible for assessing most property in the county.

The PVA does not set the tax rate. The PVA determines the assessed value of the property.

Taxing districts, such as the county, school district or city, then set their own tax rates within the limits established by state law.

This distinction is important because a higher tax bill does not necessarily mean the taxing district raised its rate. A higher assessment can result in a higher bill even when the rate stays the same.

Where does the money go?

Property taxes do not all go to one government.

A property tax bill can include taxes for several taxing districts. Depending on where a property is located, that could include the county, a city, a school district and other special districts.

Each district uses its share for its own public purposes.

For example, Barren County uses property ta/x revenue as part of its overall budget for county services. Glasgow Independent Schools and other school districts use property tax revenue to help pay for public education.

This is why the total tax bill can be much higher than the county’s individual rate.