At their budget work session on March 17, 2008, the

Albemarle County Board of Supervisors

decided to advertise a 2008 real estate property tax rate of $0.71 per $100 of assessed property value.  If adopted, this would be a 3 cent rate increase over the 2007 tax rate of $0.68.  The vote was 5-1 with Supervisor David Slutzky (Rio) voting against.  Slutzky tried to get support for a rate of $0.72.  A motion by Ken Boyd for a $0.70 tax rate failed on a 2-4 vote with Supervisor Lindsay Dorrier (Scottsville) being the only other vote supporting a 2 cent increase for advertisement.

The advertised rate sets the ceiling for the potential tax rate in 2008.  The Board of Supervisors will hold a public hearing on this tax rate on April 2nd.  The Board can adopt that rate, or a lower rate, after the public hearing, as they finalize their budget in April.  Any rate that is adopted will be retroactive to January 1, 2008.

The Board received an assessment of the “funding shortfalls” in County Executive Bob Tucker’s budget, based on current revenue and expense assumptions.  At the beginning of his report to the Board, Tucker reported that the local government budget for FY 2009 (excluding schools) faced a $900,000 deficit and staff are projecting a $3.5 million deficit for FY 2010.  Revenues raised by a tax rate increase would be split 60:40 with the school division with local government receiving 40% of new revenues.  Several Supervisors identified programs and initiatives that would require additional funding in the budget.

At one point in their discussion, the deficit reached $3.035 million for the current budget as Supervisors added new items for consideration, including

the $500,000 requested by IMPACT last week

for unspecified affordable housing initiatives.  The Supervisors were told this would require an additional 5 cents on the property tax rate to fully fund all the items.  Four initiatives were flagged for future consideration in the budget process: the cost of an additional social worker; additional funds for affordable housing; a 1 cent transfer being restored for the capital budget; and funding of unspecified frozen positions on local government staff.

The last time the tax rate was increased in 2000, the Board of Supervisors was caught by surprise by the retroactive nature of the adjustment as it provided 6 months of unanticipated revenue in the amount of about $1.2 million [

see Attorney General’s opinion on this matter

].  The tax rate follows a calendar year whereas the County’s fiscal year begins July 1st.  The increase in tax rate in April 2000 was from $0.72 to $0.76.  Tucker told the Board that each penny increase in the tax rate would add $300,000 to the current fiscal year.  Thus a three cent tax increase would generate an additional $900,000 for the local government’s 2007-08 revenues.

Because the County’s 2008 real estate reassessments were negative overall (-0.25%), the tax rate advertisement printed in the newspaper will not include what is known as the “lowered tax rate.”  When assessments increase by 1% or more, a locality has to advertise a rate that would essentially level fund government.  With virtually level assessments, that tax rate this year would be the same as last year, thus these details are not required in the advertisement according to County staff.

Brian Wheeler


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