Murfreesboro City Councilman Eddie Smotherman talks about his opposition to a property tax increase and proposed hotel tax increase to fund parks. Scott Broden, USA TODAY NETWORK – Tennessee

A $260,000 home could see $430 more in taxes and fees if proposed tax hikes get approved.

The proposed property tax hikes in Murfreesboro will be hardest on MTSU students and retirees, a former federal official said.

Middle Tennessee State University students are paying $400 to $500 per month now for off-campus apartments. That will increase if landlords see a 39% property tax increase from the City Council and a 9.5% hike from the Rutherford County Commission, said Bill Ford, a retired MTSU finance professor and former president of the Federal Reserve Bank in Atlanta.

"It’s going to be very hurtful for the students," said Ford, adding that students also will paying more for tuition.

Local finance experts say MTSU students living in off-campus housing complexes will bear the burden of increased rent if Murfreesboro City Council adopts a 39 percent tax increase to fund its budget for the 2019-20 year.

In addition to what students will face, many of the city’s retirees are on fixed incomes and don’t have enough wealth to absorb both the tax hikes and the monthly trash hauling charges going up by $5 per can, Ford said.

The council will hold a public hearing before considering the tax and spending plans during a meeting that starts at 7 p.m. tonight at City Hall, 111 W. Vine St.

Ford questions government spending

Small business owners also will be hit hard, and they will end up increasing their prices to cover the tax hike, Ford said.

"It’s also inflationary, both for people who shop at smaller businesses and students," Ford said.

Ford suggested city and county officials are wanting tax hikes to cover "wish list" spending requests from the government department heads, "adding them up and saying it’s absolutely necessary."

"This is a horrible degradation of the quality of management," said Ford, adding that budgets should only be going up to account for the current inflation of about 2% and population growth of about 3%.

Salary increases for the city, however, are going up 11%, Ford said.

Former city manager also questions tax increase

Former Murfreesboro City Manager Roger Haley also said the proposed tax hike is too high.

"It’s just too much, too fast," said Haley, adding that he understands if a much smaller increase is necessary.

Retirees living on Social Security may struggle in choosing between paying the higher taxes or buying medicine or food, Haley said.

The city has many long-time residents on fixed incomes who are living in $100,000 homes, and this group in particular will see a significant increase in taxes and trash hauling costs, Haley said.

How your tax bill could climb

The Council will consider raising the property tax rate of $0.9494 per $100 of assessed value by 37 cents, which is a 39% hike.

A Murfreesboro home owner with a $260,000 home, which is the county’s median appraisal, will pay $240 more in property taxes if the rate climbs by 37 cents. When counting trash hauling hikes, the annual cost increase will be $300.

The same owner could end up paying $430 more if the County Commission also adopts the current recommended 9.5% property tax hike.

The County Commission’s Budget, Finance & Investment Committee recently recommended a 20-cent property tax increase to the tax rate of $2.0994 per $100 of assessed value, which is a 9.5% hike. The total county bill for a $260,000 home would climb by $130 if the rate goes up by 20 cents.

City eyes tax hike: Proposed property taxes, trash fees in Murfreesboro to increase

Cost of higher education on rise at MTSU: MTSU students’ tuition may increase if approved by Board of Trustees

County tax hike proposed: Budget Committee proposes 9.5% property tax hike in Rutherford County

How would the proposed tax increases affect your household or business budget? Reach Scott Broden at sbroden@dnj.com or 615-278-5158, and follow him on Twitter @ScottBroden.

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