By Karen Gutierrez
Enquirer staff writer

Assessed property values in Newport increased by a record $126.4 million this year, prompting the School Board to cut its tax rate Wednesday.

The new rate will be $8.81 per $1,000 of assessed value. For the owner of a $150,000 home, that means a school tax bill of $1,321 instead of $1,507.

"It's good that they lowered the tax rate. But still, to raise the assessments that much was just hard to take," said Mike Dutle, who lives on East Fourth Street.

Dutle said he was livid earlier this year when his home was reassessed at $208,000, a 163 percent increase over last year. He appealed and had the amount reduced to $180,000.

Dutle and his family have lived in the historic Mansion Hill district for 25 years. They helped lay the groundwork, he said, for the neighborhood's ongoing transformation from working-class to trendy.

"The first reaction (to the reassessments) was really anger, and to say, 'They're forcing us out of here.' We felt like we were betrayed," Dutle said.

Newport's extraordinary increase in assessed property values - from a total of $415 million in January to $541.4 million now - is a reflection of several factors, officials said.

First, Newport is hot. In the last 10 years, it has seen construction of new luxury homes on Wiedemann Hill, gentrification in Mansion Hill and development of the Newport on the Levee entertainment complex.

The Levee's owners received an 82 percent discount on school taxes as an incentive to locate in Newport, but officials say the Levee's presence has boosted surrounding property values.

In addition, all property in Newport was reassessed this year by the Campbell County property valuation administrator, a process that occurs every four years. Between these periods, property that changes hands is automatically reassessed at the sale price. But homes that haven't sold in many years may carry values that don't reflect Newport's current status.

This year, all were given new values based in part on recent sales, property valuation administrator Daniel Braun said.

The Newport School Board could have left its tax rate at $10.05 per $1,000 of assessed value, which was the highest rate in Kentucky.

But considering the huge increase in assessments, the effect would have been a tax increase of more than 4 percent.

Under state law, districts can do that, but the increase is subject to recall by voters. School districts rarely choose that route, because tax elections are difficult to win.

To avoid that possibility, Newport's School Board had to cut its rate by about 12 percent. The new one is third-highest among the 14 school districts in Boone, Kenton and Campbell counties. Only Walton-Verona and Covington are higher.

E-mail kgutierrez@enquirer.com