Posted March 25, 2012
But there may be little leeway to change what is shaping up to be a record tax increase ?of 12 cents added to the present real estate tax rate of 75 cents per $100 value.
The highest previous annual jump in the real estate rate that county officials can recall was 8 cents. It has been more usual for Montgomery County to lower its real estate rate to offset rising assessments.
This year, however, the county?s budget has been squeezed by a continuing weak economy, the end of federal stimulus money, and shifts in the state budget that are predicted to reduce support to schools and other Montgomery agencies ? all coming at a time when the county has launched construction of two new high schools and renovation of a middle school.
Facing budget requests that could have translated to a 24?cent jump in the real estate rate, county supervisors last week agreed to a slimmer spending plan and voted to advertise a 12-cent increase in the real estate tax rate. The advertisement sets an upper limit on the tax rate supervisors can approve.
A public hearing on the proposed budget and tax rate is scheduled for 6 p.m. Thursday at the County Government Center in Christiansburg. Supervisors plan to adopt a final spending plan and tax rate April 16.
The twin demands of the county?s bond rating and its real estate tax billing schedule appear to leave scant room for further maneuvering.
Back in November, bond rating agencies based their favorable reviews of Montgomery County?s finances on the assumption that a 10-cent increase in the real estate tax rate would be implemented to cover debt the county was taking on to pay for new school construction. Since the rating agencies?reports are considered essential to the county?s ability to borrow money at favorable rates, it is unlikely that supervisors will go for a tax increase much below 10 cents.
County Administrator Craig Meadows? budget proposal, which supervisors OK?d last week, pegs about 9 cents of the tax increase to school construction.
Meadows recommended a 12-cent increase, with the remaining revenue helping the schools maintain a basically flat operating budget, countering an increase in the price of the county?s participation in the Western Virginia Regional Jail, and increased retirement costs, among other expenses.
While some supervisors favor an increase above 12?cents, such a move would now require re-advertising the tax rate. This would throw off the timetable of issuing the real estate tax tickets, a schedule that is central to Montgomery County?s budget preparations.
At Monday?s meeting, supervisors broke into opposing camps on the tax rate.
Supervisors Mary Biggs and Annette Perkins supported Matt Gabriele?s suggestion of a 13-cent tax increase, with the revenue from the additional 1 cent, about $700,000, dedicated to long-term planning and needs.
Supervisors Gary Creed and Chris Tuck advocated an increase lower than 12?cents. Creed, as he has been throughout the budget discussions, was outspoken on the idea of the county?s raising what he termed ?extra? money beyond Meadow?s budget proposal.
?Can you imagine a worse time to be adding to people?s tax base?? Creed said. ?This is not the time to raise extra money for anything.?
Supervisor Bill Brown and board Chairman Jim Politis held something of a middle ground, saying they liked Gabriele?s call for longer-term financial planning, but could not support a tax increase higher than 12 cents this year.
Politis said Friday that the only factor he thought would shift the 12-cent increase would be if the General Assembly?s still-unresolved budget discussions wrap up before the county?s April 16 budget vote. If decreases in state assistance prove to be less serious than expected, a lower tax increase would be required, he said.
?I still feel myself like Richmond?s going to help us a little bit,? Politis said.
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