For the first time since 1994, Hopkinsville’s property tax rate will stay put. On Tuesday, Hopkinsville City Council adopted Mayor Dan Kemp’s recommendation that the city break from its standard practice of adjusting property taxes up for inflation. The 2010 rate, which repeats the previous rate of 23.6 cents per $100 of assessed value, spares property owners additional pressure in an already stressful economy.

“During these tough economic times, we are focusing on keeping tax rates as low as possible while still maintaining a strong financial position for the city,” Kemp said.

Kemp’s confidence stems from the city’s cash reserve of more than $5.5 million. And that is a testament to careful financial management.

“By controlling our spending over the past three years, we have been able to rebuild the city’s cash reserve to a healthy position,” Kemp said.

According to projections by Chief Financial Officer Robert Martin, taxpayers get to keep a projected $96,934 this year that the city would have collected if it took the increase.   The cumulative effect of freezing the tax rate this year will be that by the year 2020, taxpayers will have saved $388,779.

Kentucky cities and counties typically take the 4 percent increase in property tax rate. State law allows them to do so without a public referendum. Before this year, the city took the 4 percent increase 15 years in a row.

The reason it’s so unusual to forgo the allowable increase is because revenue loss that results can really add up.

When the city last waived its allowable increase, back in 1994, the immediate loss was about $11,000. But as real estate assessments grew in Hopkinsville, the annual loss in revenue for 2010 has grown to more than $127,000. Totaling up each year’s losses since 1994 shows that the city missed out on more than a $1 million.

“That’s money the city gives up for good,” Martin explained.

It was only after weighing the potential benefits to citizens in economic hardship that the mayor decided the break was justified.

Easing the burden on taxpayers in a way that doesn’t threaten city services is clearly the right thing to do, Kemp said.