The Culpeper County Board of Supervisors is advertising a proposed 2-cent real estate tax hike, which will be the subject of an April public hearing. All other local tax rates are proposed to remain level.
The supervisors can approve a tax rate lower than the advertised figure, but cannot go above it.
The decision to advertise the increased rate came by a 4-3 vote, with those in favor being Gary Deal, Paul Bates, Brad Rosenberger and Bill Chase. Opposing supervisors were Kathy Campbell, Tom Underwood and Jack Frazier.
The current real estate tax rate is 62 cents per $100 of assessed value. After recent property reassessments, however, there was an average 12% increase in the value of county properties. To offset the reassessments, the tax rate has been equalized to 55 cents. Therefore, a 2-cent increase would raise the rate to 57 cents per $100 of assessed value.
As a result of the reassessments, County Administrator John Egertson explained residential properties' values generally increased more than commercial, industrial and agricultural properties. Therefore, even if the real estate tax remains level, some residents would see higher bills due to increased property values.
Egertson proposed a minimum 2-cent increase, which creates about $1.2 million in revenue, to fund costs associated with opening the new Culpeper Technical Education Center. The school system, however, is requesting an additional $1.5 million increase in county funding that would not be funded with the tax hike.
Rosenberger supported keeping the rate at 55 cents, but favored advertising a 2-cent increase for a “comfort zone” in case an unknown issue presents itself. Chase agreed, saying “who knows” what the future holds and the county should advertise 57 cents with the intent of coming down.
Supervisor Paul Bates said the “key point” is the supervisors can always approve a tax rate below the advertised rate. He added that if the rate remains level, the county’s general fund will fall short of desired levels.
Deal noted that adjacent jurisdictions’ real estate tax rates range from 80 cents to $1.25 per $100 of assessed value. Having the security of “a couple of extra pennies,” he said, “would probably be advantageous.”
Underwood said the county is currently in a good financial position, rendering it the best time to forego setting aside savings for future capital improvement projects.
Underwood said increasing real estate taxes would hurt those who were hit the hardest by the property assessments.
If the county continues growing, Underwood noted that there are other ways beyond tax increases that the tax base will hopefully improve. While approving a level tax rate would be a sacrifice for the county, he said “it’s relative to what some in our community are looking at right now and it may be the right thing to do.”
“I think we can find a way that it would not be an extraordinary struggle on the operating side at 55 cents," he said.
In opposing advertising an increase, Frazier said he favors providing every bit of assistance possible this year.
The tax rate will be the subject of an April 20 public hearing.