Scottsville’s hotel tax rate will rise 60% and its minimum business license fee will increase 66% starting July 1 to help with the town’s long-term finances.
At its Monday night meeting, the Scottsville Town Council voted unanimously to increase the town’s transient occupancy tax rate, the rate charged to short-term rentals and guest stays at inns and hotels, from 5% to 8%. The council also increased its minimum business license fee from $30 to $50 and voted to approve its Fiscal Year 2023 budget.
Councilor Dan Gritsko attended the meeting virtually but did not vote and Councilor Alex Bessette was absent.
Town Administrator Matt Lawless said the town has an exciting set of new projects coming up and has had some success with local grants, but its government services committee was concerned about the town’s long term financial health.
“The economic recovery from the pandemic has affected us unevenly and the town sees the same kind of inflation pressure in the things that we buy to perform our services that’s affecting everyone at home,” he said. “Council’s challenge in shaping this budget has been not wanting to hurt the families and the businesses in our community, but also continuing to fund with a high level of services that the public expects.”
The budget for fiscal year 2023, which starts July 1, is $1,276,258 including $272,000 for capital projects. Projects include installing solar panels at Victory Hall to reduce electrical costs, and a sidewalk project along Bird Street from Harrison Street to the end of the Levee Trail.
The project will also add missing sidewalk segments along Harrison and Main Street.
Over the last three years, a computer error led to Albemarle County paying an extra $110,283 to the town. Rather than Scottsville paying back the whole amount, the county has recommended $60,000 be used by the town to support the Bird Street sidewalk project.
The Albemarle Board of Supervisors is scheduled to formally approve the money at its meeting Wednesday.
“So that sort of covered the gap of services and capital improvement projects that we wanted to take on, and so that made it feasible for us to not raise the meals taxes this year,” Councilor Zachary Bullock said Monday, in reference to the $60,000 from Albemarle.
The town’s government services committee and council have met over the past few months to work on the budget, Lawless said.
Last year, a town real estate tax was discussed as a future need. Owners of property in Scottsville already pay real estate taxes to Albemarle County, and a town real estate tax would be on top of that.
This year, the committee’s recommendation initially was to avoid the additional real estate tax and to increase the town’s meals tax rate from 4.5% to 6%. That rate would have matched the new Albemarle rate and still have kept Scottsville lower than some of its neighboring towns.
With local restaurants still recovering from the pandemic and facing increasing inflation-fueled cost, council did not support raising the meals tax at this time.
“We worked along that and brought this revised proposal back that’s before us now,” Lawless said. “It stays in the black to the tune of $78,000 on $1.2 million in spending. That cuts it pretty close, but it’s essentially a balanced budget.”
The town is anticipating a slight increase in revenue from the Department of Motor Vehicles’ office in the town, which will again allow walk-ins.
With the DMV, business license fee and transient occupancy tax rate increases, Lawless said they’re estimating an additional $30,000 which will offset some of the loss of not raising the meals tax.
During the public hearing, two residents spoke against an increase to the meals tax, which was no longer up for consideration by council at Monday’s meeting. One also spoke in support of better Van Clief Nature Area signage downtown.
“We’re not raising any taxes except the transient occupancy tax, and that tax is paid by people that visit the town, it’s not any burden on the town’s population,” Mayor Ron Smith said.
Lawless said there are other fees that have not been changed in years that councilors expressed interest in possibly increasing.
“It’s going to take us a little bit more time to tally up that fee list and think about what the best increases are going to be, so we’ll have that here in the coming months,” he said to the council.