Albemarle County Executive Jeff Richardson has proposed a 2023 budget that’s 20.8% larger than the current year and keeps the real estate tax rate steady while increasing hotel, food and beverage tax rates.
The budget proposal also includes a decrease to the personal property tax rate, to help offset an increase in the value of used vehicles.
At a virtual meeting Wednesday, the Albemarle County Board of Supervisors received the proposal for the fiscal year that begins July 1. The budget projects $565.1 million in revenue and expenditures for capital and operational costs.
The current year’s original adopted budget is $467.5 million, according to county documents. However, the board approved a mid-year budget adjustment in December that brought the total up to $550.1 million.
“One of the county’s core values is innovation, and innovation is defined as embracing creativity and positive change,” Richardson said. “This fiscal year recommended budget is built to transform Albemarle.”
The proposal includes funding for a second high school center, a new community response team for mental health related emergency calls, two new elementary schools, and money into the county’s housing fund.
Under the proposal, the real estate tax rate remains 85.4 cents per $100 of assessed value. The latest reassessment of county real estate represented an average increase of 8.4%.
Though the real estate tax rate is not set to increase, average growth in property values means that some homeowners will see higher tax bills next year. Because of increased property values, the effective real estate tax rate — the rate that would levy the same amount of revenue as last year — would be 78.8 cents per $100 of assessed value.
The recommended budget includes an increase to the transient occupancy tax charged to hotel guests from 5% to 8%. It also includes an increase to the food and beverage taxes, known as meals taxes, raising the rate from 4% to 6%.
During the 2020 General Assembly session, counties were granted the ability to increase the meals tax to a maximum 6% and the limit was removed on the hotel rate. Both proposed increases would match similar tax rates in Charlottesville.
“Thousands of people visit our community for vacations, sporting events, weddings, and to visit our natural and historic resources,” Richardson said. “We are also a regional hub for commercial activity. Increasing our taxes in these two areas means that we can begin to shift revenues away from the people who live here and spread it out more broadly to those who are visiting our community.”
The budget also includes a full year of revenues from the cigarette tax that the board approved last year and implemented Jan. 1 and a recommended plastic bag tax of 5 cents per bag. The board has supported the bag tax, but has yet to approve it.
Richardson’s budget includes an 86-cent decrease to the personal property tax rate, which covers vehicles as well as business personal property, machinery and tools. The new rate would be $3.42 for each $100 of assessed value. The personal property tax rate was last increased in 1993.
“This speaks to the oddity that we are seeing in our national market right now with used car prices going up over the last 12 to 18 months almost 40%,” he said.
Late last year, the county’s capital improvement plan committee recommended funding a second high school center, a new elementary school, portions of Biscuit Run Park and high-priority transportation projects.
Funding for a second elementary school was also discussed at that time, and some committee members supported adding some funding for renovations of county schools.
The recommended capital plan totals $292.3 million in expenditures over five years. The recommended fiscal year 2023 capital budget, the first year of the plan, totals $92.6 million to fund the second high school center, school renovations, courts expansion and renovation project, a street sweeper and some of Biscuit Run Park.
Of one-time funding from the American Rescue Plan Act and the county’s fiscal year 2021 surplus, $6 million will go to the county’s economic development fund, $3.1 million will go to the county’s housing fund, $2.4 million will go to specific housing projects, $2 million will go to broadband initiatives and $1.75 million will go toward water infrastructure.
General fund revenue is expected to grow by $53.3 million, or 16.9%, compared to the current budget.
The proposed budget includes more than 40 new positions, or positions converted to full-time. Those include seven new firefighters at the Pantops fire station, five positions in the county’s finance and budget department and six positions for the county’s core systems modernization project to upgrade development tracking, financial and human resources systems and other systems.
Overall, the proposed budget has an increase of 72.1 positions from the 2022. More than 31 positions were added or converted in the mid-year budget adjustment.
The budget also includes 4% raises for county staff.
Utilizing the cigarette tax revenues, the recommended budget includes funding to start a community response team to respond to individuals experiencing a mental health crisis. The team will be led by the Department of Social Services and will include a police officer, a firefighter/EMT and a social worker. The team will adapt responses to the needs of the person they are assisting and connect them with community organizations for needs.
“This program responds to troubling growth in mental health calls for service that have unique needs,” Richardson said. “This program also allows for us to preserve our fire rescue and police resources where an urgent medical issue or criminal matter is not a part of the situation.”
The recommended budget includes permanent funding to continue the program coordinator at Yancey School Community Center, as a grant from the Charlottesville Area Community Foundation will expire at the end of the current fiscal year.
The school board received the superintendent’s $242 million funding request last week, and is scheduled to vote on the plan March 10. The entire local portion of the funding request is met in Richardson’s recommended budget.
The Board of Supervisors has scheduled several budget work sessions, public hearings and other meetings for the coming weeks.
The first budget work session is scheduled for 3 p.m. March 9 and will be held over Zoom. The first public hearing is during the evening portion of the Board’s regular meeting on March 2, also over Zoom.
The board is scheduled to adopt a budget on May 4.
More information on the budget process can be found at albemarle.org/government/budget.