Tax hike appears likely
by Larry S. Chowning
Middlesex County Administrator Charles Culley reported at a board of supervisors meeting Tuesday night it could take as much as an 8 to 10 cent real estate tax hike in the upcoming 2010-11 (FY11) fiscal year just to “level fund” the county budget and build cash flow.
“Level fund” means no spending increases over current FY10 levels.
This bleak news came just two days before county supervisors were scheduled to meet with Middlesex school officials, who are seeking $520,000 in additional local funds to offset a loss of over $700,000 in state funds in FY11.
Culley attempted to explain that county taxpayers have been paying, in effect, a tax rate of 29 cents per $100 worth of real estate—not the 35-cent rate stated on their tax bills. A 29-cent real estate tax rate would be the lowest in the state.
Culley explained that information provided by Tri-County Appraisal Inc. after the county real estate reassessment in 2007-08 indicated each penny of a 35-cent tax rate would generate $256,000 in revenue. However, each penny on the tax rate actually only generated $211,704, which equates to a tax rate of 29 cents per $100 of value.
Culley said the information Tri-County Appraisal Inc. gave him to prepare the FY09 budget was only preliminary because the firm had received an extension to finish its work.
Culley said the county went ahead and set a 35-cent tax rate in the spring of 2008 without a completed reassessment, but this rate did not generate enough revenue to cover the FY09 budget.
When final county real estate values were determined after the tax rate had been set at 35 cents, there was 20% less property value than what Tri-County had predicted. Some of this decrease was because over 1,000 people challenged their reassessments before the local Board of Equalization, and many of these people ultimately received lower appraisals of their property.
Eric Johnson of Stormont questioned Culley’s contention that the county only has a 29-cent tax rate. “The taxpayers have been paying 35 cents on the assessed value of their property, and you are proposing a 30 percent increase in real estate taxes any way you look at it,” he said.
Bob Calves of Urbanna suggested that supervisors consider raising personal property taxes and other fees instead of placing all the proposed tax increase on real estate.
Culley indicated supervisors cut the budget 7 percent last spring to keep the tax rate at 35 cents in FY10, but said a tax increase will be necessary in FY11 unless funds are borrowed during the fiscal year to keep the county operating.
