Warrenton council votes to equalize property taxes; mayor, top executives worry

Left to right, Warrenton Councilman William Semple (Ward 2), Mayor Carter Nevill, Councilor Brett Hamby (Ward 3) and Vice Mayor James Hartman (Ward 4) vote on a motion to equalize the rate the city’s property tax office at a May 10 meeting.

Warrenton City Council voted unanimously this week to raise the city’s property tax rate from 5 cents per $100 of assessed value to 4 cents in a bid to maintain the level of taxation for homeowners locals, and the council seems set to reject further tax increases in the city. Manager Brandie Schaffer’s proposed budget for fiscal year 2023.

But Mayor Carter Nevill and senior officials argue that failure to raise taxes could put the city in dire financial straits and impact the quality of city services.

During the city council’s morning business session on Tuesday, several council members reported that they were very concerned about Schaffer’s $32.4 million spending plan, which would increase the city’s budget by 5,000,000. $9 million, a 22% increase from fiscal year 2022. The main argument of several council members, including Ward 2 council member William Semple, was that the tax increase would negatively affect many city residents suffering from things like rising inflation and rising gas prices.

“We’re growing faster than we should,” Semple said during Tuesday’s business session.

Local taxes, including the general property tax, account for almost a third, or approximately $11.3 million, of the City’s operating budget, which funds services such as garbage collection, street paving, police services and snow removal, among others. And not increasing taxes, according to the town hall, can directly affect the quality of these services.

Schaffer had proposed in his budget that the city maintain its current rate of $0.05 per $100 of assessed value. Since property values ​​in town have increased by 22.05%, the average resident’s tax bill would rise from $171.87 to $209.68, or $37.81.

The council was required by Virginia law to pass the property tax rate by May 15 and therefore opted for equalization – meaning council members lowered the property tax rate to whatever keeps taxes steady for average homeowners — so residents don’t have to pay the extra $37.81.

According to the city manager’s office, council lowering the property tax rate from 5 cents per $100 of assessed value to 4 cents would currently eliminate $189,916 in revenue from the city’s operating budget for fiscal year 2023 over the based on the Commissioner’s total assessment of real estate value income.

Schaffer told FauquierNow that the $189,916 in additional revenue would have helped offset rising costs to the city due to inflation, as well as the potential food tax loss that the Virginia legislature is currently considering. to reduce. Eliminating the grocery tax would cost the city an additional $265,475 in tax revenue.

“The proposed rate partially offset this anticipated loss,” Schaffer said. “The board may adjust to compensate in other areas, but staff view this as an anticipated recurring revenue loss that will need to be compensated for annually, not just FY23…Once we cover the fiscal year 23, it’s not a new loss every year, but looking at a five-year perspective, it’s a revenue stream that probably won’t exist before, so planning is necessary this loss.

The city manager’s office noted that the property tax rate reduction not only affects the city’s fiscal year 2023 budget, but also reduces Warrenton’s current operating budget by approximately $95,000.

Schaffer said she doesn’t know how the reduction in the property tax rate will affect this year’s budget or next year’s in terms of services and compensation. It will be up to Council, which has a work session scheduled for May 18 at 7 p.m. to discuss the budget.

Semple told FauquierNow that he doesn’t think equalizing the property tax rate means there will be a cut in funding for services. He noted that this could have an impact on the general fund, but added that the council must “ensure that the budget corresponds to the needs of the citizens”.

“I just assume that within the $35 million budget, we’ll be able to find money somewhere,” he said. “There are always places where you can cut back…if you took all the departments and split them, there might be some [money] here and some [money] the.”

In addition to combating rising cost inflation and cutting state subsidies, Schaffer’s proposed tax increase in his budget would allow the city to fund new capital improvement projects, d ‘hire more full-time positions and increase current employees.

Among the most urgently needed capital improvements are water and sewer projects, which would be funded by an increase in the city’s water and sewer rates.

If Schaffer’s proposed budget is adopted, customers’ water and sewer bills would increase slightly. For customers with minimal water usage (2,000 gallons per month), their bills would increase by $1.39 per month. The median water usage in Warrenton is 3,000 gallons per month, which would increase customer bills by $3.08 per month, according to the city manager’s office.

In total, there are 42 proposed items that the board and staff are funding that have been postponed in recent years due to the pandemic.

Schaffer noted in his proposal that the city experienced a 13% turnover rate in 2021, with the hardest hit departments being police (23%), utilities (17%) and public works (36%). .

The main reasons for leaving were pay, retirement and better job opportunities elsewhere.

To address this issue, Schaffer proposed increasing employee salaries by 5-7%, with 5% guaranteed “to meet cost-of-living increases for all employees” and an additional 2% depending on the ” work performance” of employees.

Schaffer offered to fund five new employee positions, including a new position for police sergeant and junior utility engineer, as well as raising the position of city clerk from part-time to full-time.

Mayor Carter Nevill told FauquierNow that he was disappointed that Council decided to lower the property tax rate to 4 cents for several reasons. First, he said it makes the city more dependent on other forms of revenue, including the meal tax (currently the city’s largest source of revenue, totaling 21%), which makes the city more vulnerable. to recession.

“When you look at revenue streams, there should be some balance…if you’re relying on the corporate sector to bear the burden of your revenue. In the event of an economic downturn, you make yourself vulnerable,” he said.

Second, Nevill noted that failure to increase tax revenue undermines the city’s ability to provide quality services to residents.

“The [tax increases] are portrayed as exorbitant … but I pay $190 in property taxes for my house, every year,” Nevill said. “From the city, I have garbage picked up twice a week…for every dollar, I probably get two and a half dollars and services in return. It’s wonderful and we should celebrate that.”

Nevill said he was skeptical of council members who voted to lower the property tax rate and advocate for possibly preventing further tax increases, but who continue to delay salary increases and increased funding for infrastructure projects.

“…that money has to come from somewhere,” Nevill said. “The challenge is that you have board members who have expectations and want shiny new things…but how do we increase our recreation parks and recreation opportunities…all of that, when you contract the budget ?”

Nevill, who is only allowed to vote in a tie among board members, said he would have voted against the rate cut if given the chance.

During Tuesday’s morning business session, city council members said they were also considering preventing other tax increases proposed by Schaffer, including raising the meal tax from 4 to 6. % and tax on cigarettes from $0.20 to $0.40 per pack. Together, the two tax increases would generate nearly half a million dollars in revenue for the city.

Alec Burnett, president of the Fauquier Chamber of Commerce, said Tuesday that he wants the Council to consider reviewing the proposed meal tax increase because of the burden it could place on business owners.

However, by equalizing the property tax rate, Nevill said, the Council may inadvertently place a greater burden on business owners, including restaurants, if they decide to raise the tax on meals.

“I would still be in favor of a 6% meal tax…I think that will be an interesting question for council to answer as…they have shown a willingness to ease the tax burden on residents,” Neville said. “Are they going to do the same for businesses?”

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