Live, Work, and Pay Downtown

Parsing the tax bill for living in a "special assessment district"

It's that season again. Fall is in the air, it's football time in Tennessee, and it's that special month when the city and county issue their annual property tax statements. Both arrived in my mailbox on the same day a couple of weeks ago.

Most Knoxvillians are going to see a tax rate of $2.81 per $100 of the assessed value of their property. That's the rate listed for 2007 taxes on the city's website and a call to the city's revenue office confirms it's the same for 2008.

However, for those of us who own property within the Central Business Improvement District (CBID), the tax rate shown is $3.13 per $100 of the assessed value. That's because we're in a "special assessment district." In addition to paying city and county taxes, we pay an assessment that funds the CBID. You wouldn't know that from looking at the statement, though.

The section of the city's Code of Ordinances regarding the CBID reads: "A special assessment shall be levied against all taxable real property within the Knoxville CBID." It goes on to say, "Notice of the special assessment shall be issued simultaneously with tax notices for regular city real property taxes."

The problem is, there was no such notice. It simply listed the tax rate as $3.13.

The CBID assessment, according to Michele Hummel, director of the CBID, is 32 cents per $100 of the assessed value of property. Add that to the city's $2.81 and it yields the sum of the tax rate listed on the "TAX DETAIL" section of the statement: $3.13. With a heading like TAX DETAIL, you might expect to find, you know, details.

Following my contact with Ms. Hummel, and her subsequent contact with the city's revenue office, the city sent out an additional tax statement, along with a letter of explanation, noting the CBID levy.

This assessment applies to all residential property downtown. If you rent here, you can bet that it's passed along to you just like any expense associated with a rental property. Commercial properties are likewise subject to the assessment, though their contribution is higher because the assessed value is based on a different calculation—40 percent rather than the residential assessment of 25 percent.

Contrary to an article published in the Aug. 7 issue of the Knoxville Voice ("Condo Sweet Condo?"), Mayor Bill Haslam did not coin the phrase "Live, work, and play downtown." That phrase, and variations on it, has been a mantra for downtown boosters like City People and the CBID for years before Haslam took office.

The roots of it can be traced to the mission defined by the legislation authorizing the creation of the CBID in 1992: "To relieve the City of Knoxville by undertaking those programs and services which government is unable to provide, which will bring more people to downtown Knoxville to work, live, shop and play."

Yet, the CBID is somewhat of a mystery to many. A lot of people aren't quite sure what it does.

To cite a few of its efforts toward fulfilling its mission, it manages the city's Residential Parking Permit Program. That allows residents to pay a fee of $125 per year to park at specially marked meters, up to the maximum time allowed as noted on the meter, without having to deposit coins. A windshield sticker wards off ticketing by KPD (but again, that's only for the maximum allowed time on the meter—go over that time and permit holders are subject to the same fines as anyone else). That goes somewhat toward making downtown a better place to live—at least if you own a car and can find an open spot where residential parking is sanctioned.

The CBID also supports the Parking Break Program, which, among other things, provides tokens good for KAT bus rides into downtown. This gives center-city workers and visitors an option to avoid parking costs in an effort to make downtown a better place to work.

A quick glance at the 2008-2009 draft budget for the CBID shows over $63,000 going to support events downtown, many of which are attended by folks from all around the city and the region. A better place to play? Check.

All of these undertakings are paid for solely through the special assessment levied on downtown property owners. While the CBID funds many efforts to draw people downtown—as well as make it a better place to live, work, and play—the businesses and residents of downtown foot the bill.

The special assessment doesn't particularly bother me. I feel like I live in a place where, every day, things get just a little bit better. And, hopefully, future tax statements will reflect the assessment's total as a separate line item. I'm sure many downtowners would like to know exactly how much they pay toward helping make downtown a better place.