Likely county tax hikes loom

By Jane DeGeorge
Eagle Reporter

Published: June 5, 2008

Madison County residents will likely face increases to most county tax rates and fees later this year.

The proposed $37.9 million budget contains a 12.5 percent increase of the equalized real estate tax rate – bringing it to 45 cents per $100 of assessed value.

Officials estimate the rate and fee increases will provide the county an additional $1.78 million for the 2008-2009 fiscal year – including an additional $195,500 to support Madison County Public Schools.

The board of supervisors has also proposed to use this new money to cover $900,000 spread across multiple county departments and put an additional $674,000 into the county’s “contingency reserve” or “rainy day fund,” which is money set aside to pay for unexpected expenses that arise during the year.

A second public hearing regarding this revised budget and the county’s proposed tax rates is set to begin at 6:30 p.m. Monday, June 16 in the auditorium of the County Administration Center.

At the board’s May 29 workshop meeting, county officials said current estimates show that the schools will likely receive about $182,000 less state and federal funding during the 2008-2009 fiscal year compared to the current fiscal year.

Officials say the proposed increase in the school system’s budget should cover this funding gap – although it falls short of the $975,000 increase the school board had previously requested. At the meeting, County Administrator Lisa Kelley said county officials still had not “heard exactly why an additional $975,000 is so essential.”

The majority of the school board’s requested budget increase was for a proposed average salary raise of five percent for all employees, which had been revised from a previously proposed increase of seven percent. School officials had said the increase was necessary in order to attract and retain high-quality teachers and staff.

County officials have requested that the school board provide them with information about what the schools’ budget would look like at this currently proposed level of local funding.

“[We want to know] if [the school board] has funding at this level, what programs do they feel they truly need to cut and what additional things would be given priority,” Kelley said at the May 29 meeting.

County officials say they would like this information prior to their approval of the budget in late June so they can revise the budget if they feel its necessary to give additional money to the schools.

The school board has scheduled a budget workshop meeting set for 5 p.m. Thursday, June 5, at the school board’s headquarters off Fairground Road in downtown Madison. 

Reserve increased

Officials plan to set aside an additional $674,000 – funded by the proposed tax increases and fees – to be put in the county’s “contingency reserve” or “rainy day fund,” which is money set aside to pay for unexpected expenses that arise during the year.

The county administrator had previously requested the board increase this fund to $500,000 at its March meeting “given the uncertainties and how close you are asking the departments to be this year,” she had said. The most recent increase brings the reserve’s budget to $1.17 million.

The county administrator and Finance Director Teresa Miller suggested the supervisors beef up the contingency account to pay for unanticipated expenses related to the second phase of the Madison County Courthouse project, the rising costs of fuel and if officials mistakenly overestimated that $1.2 million would be leftover from the current fiscal year’s budget.

Kelley also said that having this extra money set aside in the “contingency reserve” would ensure none of the county’s accounts would be completely depleted as the supervisors begin other upcoming large construction projects.

“It allows a comfort level for a number of different reasons,” the county administrator told the board at its workshop meeting.

The supervisors previously included $300,000 in its “contingency reserve” for both the current fiscal year and the 2006-2007 fiscal year. Actual expenses listed in the budget for the “contingency reserve” for the 2004-2005, 2005-2006 and 2006-2007 fiscal years was $0, according to budget documents. 

Additional loans sought

The revised budget now includes a $5 million loan to cover the cost of the second phase of the Madison County Courthouse renovation project, which is set to begin this summer. Officials had previously planned to take out a $3.75 million loan toward the project.

At the May workshop meeting, the supervisors went into closed session for the stated purpose of discussing bids for the second phase of the courthouse project. The board is expected to vote to accept a contract for the project at their next regularly scheduled meeting set for 3 p.m. Tuesday, June 10 in the auditorium of the County Administration Center.

Other changes included in the county’s revised 2008-2009 proposed budget include:

• A $32,675 increase to the Madison County Sheriff’s Office budget (not including the sheriff’s courtroom security budget). Due to an official’s calculation error, a different, incorrect number was listed in the county’s previously advertised budget.

• An $18,714 decrease in the amount requested by the Rappahannock Juvenile Detention Center.

• A decrease of $1,250 to the Madison County Library’s budget due to a change in state funding.

A second public hearing regarding the county’s proposed 2008-2009 fiscal year budget is set for 6:30 p.m. Monday, June 16 in the auditorium of the County Administration Center, prior to the county’s public hearing regarding its proposed tax rates at 7:30 p.m. that evening.

A synopsis of the revised budget is available within the June 5 edition of The Eagle.

IF YOU GO
WHAT: Second public hearing about proposed 2008-2009 fiscal year budget and tax rates.
WHEN: Monday, June 16: 6:30 p.m., budget public hearing; 7:30 p.m., tax rate public hearing.
WHERE: County Administration Center auditorium at 414 N. Main St. in downtown Madison.

The Madison County Board of Supervisors is currently advertising the following tax rates and fees:

• A real estate tax rate not to exceed 48 cents per $100 of assessed value (an increase from the equalized tax rate of 40 cents per $100 of assessed value).

• A tangible personal property tax rate not to exceed $2.80 per $100 of assessed value (An increase from the equalized tax rate of $2.67 per $100 assessed value). (The value of farm machinery that residents have paid taxes on for at least four years will be set at $0.)

• A machinery and tools tax rate not to exceed $1.47 per $100 of assessed value (An increase from $1.10 per $100 of assessed value).

• $30 fee for automobiles (including vans and sport utility vehicles), trucks and motor homes (an increase from $25).

• $15 fee for motorcycles (an increase from $10).

• $10 fee for both travel and utility trailers (an increase from $7.50).

Officials estimate that if they set the real estate tax rate at 45 cents per $100 of assessed value and approve the rest of the proposed maximum increases, the county will receive an additional $1.78 million for the coming fiscal year.

Figuring out how much your tax bill may change this year is slightly tricky. Here are some tips to help figure it out:

• Divide the value of your property after the most recent reassessment by 100. For a $300,000 property owner, that would be $3,000.

• Multiply that figure by the tax rate. If the rate of 45 cents per $100 of assessed value included in the proposed budget is approved, that would be $1,350. If the proposed maximum rate of 48 cents is approved, the tax bill would be for $1,440. (Make sure to format the tax rate into a decimal – 45 cents is .45, 48 cents is .48.)

• To figure out how much your bill will change compared to last year’s, calculate the difference between the above number and your 2007 tax bill (which is based on property values set during the previous reassessment).

Example of the change in tax bills from 2007 to 2008 for a property owner whose property value increased by 50 percent during the most recent reassessment:

• In 2007, your property value was $200,000. At the previous tax rate of 59 cents per $100 of assessed value, your tax bill was $1,180.
*Following the most recent reassessment, your property value is now $300,000. At the equalized tax rate of 40 cents per $100 assessed value, your tax bill would be $1,200.

• If the proposed tax rate of 45 cents per $100 assessed value is approved, your tax bill would be $1,350, an increase of 14.4 percent or $170 since 2007.

• If the proposed tax rate of 48 cents per $100 assessed value is approved, your tax bill would be $1,440, an increase of 22 percent or $260 since 2007.