LOUISVILLE, Ky. (WDRB) – About 4,500 rental houses in Jefferson County, many in impoverished west Louisville, are no longer getting a tax discount that new Jefferson County Property Valuation Administrator Colleen Younger said was “unfair” and even illegal.
Younger announced last month that she would remove a 15% discount that her predecessors had given for more than a decade on the tax assessments of single-family homes that were leased to tenants. Assessments are supposed to reflect the “fair cash value” of a property, and Younger said there was no legal basis for the discount.
The discount meant that landlords ended up with lower property tax bills, which are due annually at the end of December. Tax bills are calculated as a percentage of assessments.
“Personally for me, it was a value judgment that I felt like needed to be made,” Younger said. “… We felt like it was very important to level the playing field.”
The removal of the discount put about $45 million of assessed value back on the tax rolls, said officials in Younger’s PVA office. Jefferson County’s entire tax roll is about $66 billion.
The PVA office produced a list of properties that had been getting the discount, but an open records request shed little light on the origin of the policy or how it has been applied over the years.
Younger, a Democrat, said it’s her understanding that the discount started in 2005 under John May, a real estate appraiser who briefly served as PVA by appointment of then-Republican Gov. Ernie Fletcher. Younger easily defeated May, her Republican opponent, in the November 2018 election.
In response to a records request seeking any documents outlining the “discount” policy, Younger’s office produced a single 2007 letter, in which a landlord complained to then-PVA Tony Lindauer about not receiving the discount.
In the letter, the landlord said May had told a Louisville real estate investor group in 2005 that “if a home is used for rental purposes it will get an automatic deduction of approximately 15 percent off the valuation.”
In an interview, May said he didn’t change anything about how properties are assessed during his tenure, which was about a year and a half.
He said the fact that a house is used as rental property could be one of a number of characteristics – like whether it has a pool or a garage – that are used to compute an assessment.
May said he merely continued the policies of Denise Harper Angel, who was PVA until being elected to the state Senate in 2004.
“Best I can remember, Denise Harper Angel is the one who implemented a policy, or the use of this particular variable, where you could call in and say ‘Look, my property is a rental property’ … and they would give you some kind of reduction,” May said.
But in a recent interview, Harper Angel said she knew nothing of the issue until Younger brought it up last month. “I am not aware of any type of discount like that,” she said.
May also questioned why the discount, if it was problematic, remained in place during the subsequent 12-year tenure of Lindauer, a Democrat, who employed Younger as a top aide starting in 2011. Lindauer did not return a call seeking comment on the issue.
Younger said she only learned about the rental discount “last year” and made sure to eliminate it when she came into office.
A spokesman for the Kentucky Department of Revenue, which supervises county-level PVA offices, did not return a call and email for this story.
Monday afternoon is the deadline for homeowners who are unhappy with the tax values Younger’s office mailed late last month to file an appeal.
Tax assessments were adjusted primarily in Old Louisville, West Louisville and southwest Jefferson County, as those areas went through a uniform reassessment this year. But assessments were also adjusted outside of those areas for reasons like a sale or a building permit.
For information about the process, go here.