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City Council talks 1-cent real estate tax hike as Monday vote nears

It’s a plan that needs a little tweaking.

Charlottesville City Council is considering changes to its proposed 2023 budget even as its adoption day quickly approaches. Those changes including adjusting tax rates and budget amendments.

The city is anticipating a surplus of at least $12 million from the current year and that’s changed some of the ways councilors are looking at the next budget, Mayor Lloyd Snook said during a Thursday night work session.

One change is not raising the real estate tax rate by 10 cents per $100 of assessed real estate value, a rate which the city previously advertised.

“One of the questions that people have asked a number of times since we’ve started having this conversation last week, when it looked like we would have enough money without raising taxes has been ‘why the heck did you scare us all to death with this new 10-cent tax increase?’” Snook said.

“We typically have not tried to factor into our thinking a surplus that we expect in the fiscal year that we’re presently in,” he said. “That surplus is typically not fully known.”

Most councilors voiced support for a one-cent real estate tax rate hike to raise tax dollars for funding future projects. That would allow keep the city from having to a large increase in property taxes in the next year.

The proposed 10-cent increase was voted on when the council focused on funding the renovation and expansion of Buford Middle School. Currently, councilors are looking at new plans for funding the schools reconfiguration project that would not require raising the real estate tax a full 10 cents.

At a work session last week, Senior Budget and Management Analyst Krisy Hammill offered two funding scenarios. In one, the city would use $54 million in bond funds along with $14.8 million from other cash sources. The other scenario would require the city to use $50 million in bond funds with $18.8 million from the other cash sources.

Those sources would include potential American Rescue Act Plan funds from the schools and surplus funds from the current budget, which the city estimates at more than $12 million.

The reconfiguration project option proposed by the school board is estimated to cost $76.8 million. An alternative $68.8 million option was presented by the developer but would delay construction on one of Buford’s buildings that includes the auditorium.

“[I support] a one-cent real estate tax increase for a fund that goes directly to the schools,” said councilor Sena Magill. “I know we have this surplus, but I don’t count my chickens.”

Snook said he is opposed to raising the real estate tax rate at all due to rising real estate assessments in the city. Home assessments in Charlottesville rose by an average of 11.69%. That will automatically increase tax bills, even if the tax rate does not change.

“I think it is a hard sell to tell voters we’re going to charge you money that we don’t actually need this year. We may need it next year, but we want it this year and we’re going to stick in the bank,” Snook said. “We’re taking the money from voters and putting it in our bank account and not theirs.”

Councilors voiced general support for a 0.05% meals tax rate increase, with most councilors, except Vice Mayor Juandiego Wade, wanting to keep the personal property tax rate the same.

The city also looked at potential amendments to the budget. One would allocate $300,000 to the Department of Diversity, Equity and Inclusion. Deputy City Manager Ashley Marshall, who heads the department, said there was not a line item for the department in the initial budget. Previous city studies and discussions support this funding.

“The funding that is allocated there would provide support for team members including a community health worker that would be tasked with providing support for housing navigation specifically for individuals who are unhoused,” Marshall said.

The money would also provide training.

“It’s how to make sure that we’re treating our community with excellence,” Marshall said. “The training I’ve chosen has deep meaning and would move the organization forward and the thought process and mission for racial equity, diversity and inclusion.”

Councilors also discussed allocating $2 million in surplus money for CAT bus route expansion and $1 million to create a city manager fund. The money would allow a permanent city manager, which the city plans to hire this year, to institute their own ideas upon arrival.

“My thought was not that this is something that the city manager would be able to spend on his or her own initiative without consulting with Council,” Snook said. “With consultation with Council there’s money [so] the new city manager could say, ‘this is the direction I want to be able to go, I want to be able to go now and not next fiscal year.’ Boom, we’re ready.”

Source: www.dailyprogress.com

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