Fiscal Court at a meeting Thursday unanimously approved a tax rate of 14.5 cents per $100 assessed value, a half cent higher than last year's.
The rate applies to real and personal property, non-commercial aircraft and watercraft, and bank deposits.
"I would have preferred it stayed at 14 (cents), but that's not our call," Magistrate Phillip Kring said at the meeting.
The new compensatory rate is supposed to produce the same amount of revenue as last year's adopted rate, plus revenue from new property.
In May, Judge-Executive Ted Collins said he was reluctantly recommending an increase in the county property tax, which would have produced 4 percent more revenue than the approved compensatory rate. After listening to citizens' concerns and gauging the local economy, however, Collins recommended the compensatory rate on Thursday.
"It's time that we tighten up our belt," Judge-Executive Ted Collins said.
In efforts to save money, Collins said he met with Franklin County officials requesting that they stay within budget and look for ways to trim costs 3 to 4 percent.
Collins also said the county is beginning to make Energy Star equipment purchases that will save on energy costs and recommended that members of the court carpool to conferences in the future when possible.
"It appears we are going to have to make some tough decisions before Sept. 1," Collins said during the work session.
In past years, Fiscal Court went with the compensatory rate in 2006 and 2007, and the 4 percent in 2005.
In June, Fiscal Court approved a $21.8 million budget in part to finish paying the Hunter Hay jail debt.
The budget allocates $890,000 to erase the debt stemming from a jail settlement more than eight years ago involving Hay, the former Franklin County jailer.
The budget also includes a 4 percent pay raise across the board for county employees.
In other business Thursday, Fiscal Court:
>Unanimously approved an ordinance to rezone 3.5 acres at 1437 Louisville Road from Rural Residential to Highway Commercial. The Stewart Miller Estate requested the change.
>Approved an ordinance to rezone 1.8 acres at 4241 U.S. 127 south from Rural Residential to Industrial Commerce. Mary Belle Dailey, owner of the property, requested the change so her grandson, John Dailey, can expand a welding shop " that preceded zoning laws " and move it to another part of the farm.
>Held the first reading of an ordinance to amend the fiscal year 2008-2009 budget to increase the receipts of the CDBG/Federal Projects Fund by $100,000.
>Approved a resolution for release and reversion of rights-of-way within the unimproved Valley View Subdivision off U.S. 421 north.
>Approved the renaming of Hamilton Drive to Clifty Drive within the Valley View Subdivision.
>Appointed Charlie Booe to the Restaurant Association position on the Frankfort/Franklin County Tourist and Convention Commission for a three-year term. Booe is also a member of the Planning and Zoning Commission.