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Proposed Middlesex tax increases would generate $1,857,364

by Larry Chowning

The Middlesex County Board of Supervisors (BOS) proposed 2018-19 (FY19) $26,246,196 budget calls for an increase of $1,857,364 in new tax revenue—the highest “dollar” tax increase in Middlesex history.

There have been only two other large tax increases comparable to this proposal. In 1980, the largest “penny” tax increase on real estate—9 cents—was approved by the BOS. In 1980 the approved budget was $3,633,901 and the 9-cent increase per $100 on the real estate tax rate generated about $224,000 in new revenue. Each penny on the tax rate in 1980 generated $19,300. The funds raised by the 1980 tax increase went primarily to the schools.

Thirty years later in 2010, supervisors voted 3-2 to approve an 8-cent tax increase on real estate. By 2010, the county budget had grown to $19 million and each penny on the real estate tax rate generated about $200,000. The 8-cent tax hike that year generated about $1.6 million in new revenues. That budget provided no additional local monies for schools. It primarily was used to establish a fund balance so the county would not have to borrow money to pay bills. County officials miscalculated 2009 revenues, which resulted in an end-of-the-year shortfall of $400,000. At the end of the fiscal year, the county was pulling from its fund balance to pay bills. That situation did result in county officials looking at other revenue sources, such as the meals tax, BPOL (business licenses) and others. The personal property tax rate was not raised in 1980 or 2010. 

In 2009 supervisors were forced to take out a $3 million line of credit to make sure there was going to be enough funds to cover monthly expenses. The 2010 tax increase enabled the county to operate without using any of that line of credit and over time built up a fund balance.

Read the rest of this story in this week’s Southside Sentinel at newsstands throughout the county, or sign up here to receive a print and/or electronic pdf subscription.

posted 04.11.2018

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