Charlottesville’s City Council will advertise a potential 10-cent real estate tax rate increase even though councilors have not reached a consensus on whether the increase should be that high.
Councilors on Monday agreed to legally advertise a potential 10-cent tax for every $100 of assessed value. The city has a deadline of Feb. 14 to choose a tax rate and then publish it to alert the public. Law requires the proposed rate be publicized at least 30 days prior to the first public hearing on a tax rate hike.
That hearing is slated for March 21.
Interim city manager Michael C. Rogers prompted a tax rate discussion at Monday’s meeting that was not originally on the agenda. City senior budget analyst Krisy Hammill led councilors through scenarios of how different increases, including no increase, would impact the city’s budget.
If the city doesn’t increase the real estate tax rate, city staff members say it could be difficult to pursue any capital projects for up to 10 years.
The current real estate tax rate is 95 cents per $100 of assessed value.
“Even with a 10 cent tax increase, I just don’t feel like we are having a realistic conversation. I feel like where we are right now is reckless and irresponsible,” councilor Michael Payne said. “We are not seriously discussing how we are going to fund housing, climate or just the ability of the city to operate efficiently.”
Some councilors, including Mayor Lloyd Snook, voiced concern about raising the real estate tax rate significantly when real estate assessments in Charlottesville have increased by an average 11.69%.
Even if the city does not raise the tax rate, the increase in assessed values will raise the property tax charged to a property’s owner.
“I have said for years that I think Charlottesville is under taxing, as far as the real estate tax goes,” Snook said. “The catch is, I think that raising rates in any significant way on top of an [almost] 12% reassessment increase is, to a lot of people, going to seem ludicrous.”
Snook said he isn’t against raising taxes over time, but wondered if this is the year to do it, given the high reassement values.
Payne said while he generally supports the increase as necessary to fund projects, he wants to evaluate how a tax increase will affect communities like the 10th and Page neighborhood, where assessments have gone up as much as 25% in some cases.
Staff has told councilor that they would need to raise the real estate tax rate by 10 cents in order to fund the reconfiguration of the city schools, a projected $75 million project. While architects working on the project have been trying to keep rising construction costs to something close to that number, some councilors seem convinced the project could cost less.
“That number could come down, upon further conversation,” said Councilor Brian Pinskton. “We have some wiggle room in terms of the cost of that project.”
There may not be much room to move. The latest round of reconfiguration designs for Buford Middle School, an important project in the reconfiguration plan, came in at $82 million.
Wyck Knox, project manager for VMDO Architects, which is leading the reconfiguration project, has told the council and city school board that the firm is looking at major cuts to get the cost back down to $75 million.
Pinkston said he is leaning towards a 5-cent increase rather than a 10-cent increase, but hasn’t fully decided.
Charlottesville’s current real estate tax rate is relatively low compared to other localities in the state. Alexandria has a $1.11 tax rate, Richmond has a $1.20 tax rate and Roanoke has a $1.22 tax rate, for example.
Albemarle County’s real estate tax rate is 85.4 cents for every $100 of real estate value.
Although the city councilors could not agree on a tax rate, they unanimously agreed to lower the speed limit on Fifth Street from 45 miles per hour to 40 miles per hour.
Community members have been calling on the city to take more safety measures after a Richmond woman was killed in a crash on the downtown street on New Year’s Eve. Seven people have been killed in accidents on the road in the last six years.
City traffic engineer Brennen Duncan told The Daily Progress last month that more changes will need to be made to the roadway to substantially prevent more accidents. Lowering the limit, he said, is a small but important step.
Duncan recommended City Council to lower the speed limit by five miles per hour in November 2020, but the recent fatality drew new attention to his recommendation.
“The majority of drivers are going the speed limit, but there are a significant number of fender-bender, bumper-type things and reducing the speed limit by five miles an hour may help [fix] that,” Duncan said.
Many of the deaths on the road were not related to the speed limit but to reckless driving behaviors or driving under the influence, Duncan said.
That’s where more major changes have to come in, including the possibility of creating roundabouts at some intersections.
“That’s where that roundabout idea would come in, trying to put something in the middle of that corridor to cut it up, so it’s not a mile long straightaway,” he said.
Duncan and Deputy City Manager Sam Sanders are assessing more changes the city can make and will be bringing a report to City Council in the near future.