Fredericksburg eyes raising real estate taxes

April 23--The city of Fredericksburg is advertising a 79-cent real estate tax rate, which is 2 cents more than the rate City Manager Bev Cameron proposed in his budget.

The higher tax rate would allow City Council to fully fund Fredericksburg School Superintendent David Melton's proposed budget for city schools.

City Council asked Cameron and his staff to determine what that rate would have to be after Melton said that the school system would need a $734,492 increase over its current budget, in part to provide teachers for an estimated enrollment of an additional 50 students this fall.

Cameron's proposed $90.2 million budget includes nearly $27.6 million for Fredericksburg's public schools, which accounts for 30 percent of the city's General Fund for the fiscal year beginning July 1. Melton's proposed operating budget, which includes state and federal funds, is nearly $43 million.

The City Council has approved increased funding for the school system in the past, but council members expressed reluctance at Tuesday's work session to raise taxes to fully fund Melton's request.

Councilman Billy Withers did some quick mental calculations about what a 2-cent increase in the tax rate might mean for a hypothetical property owner.

"Twenty dollars a month to people making less than $2,000 a month, that's a lot," he said.

Councilwoman Kerry Devine said that people are also facing other increases in expenses.

City Council cannot adopt a real-estate tax rate higher than the advertised rate without additional advertising and public hearings. It can, however, adopt a lower rate. City Council will hold another budget work session and the first of two votes on Cameron's proposed budget on April 26. The final vote on the budget is scheduled for May 10.

Whatever the decision, some who own property in the city will likely see their real-estate tax bill increase while others may see a decrease. That's because property was reassessed for tax purposes this year, something that's done every four years.

The commissioner of revenue will send out the reassessment notices May 9, after which taxpayers can make an appeal if they disagree. The assessments will be certified on July 1.

The total assessed value of real estate, minus new construction or improvements, is expected to increase by 7.33 percent over last year. To offset that increase, the city lowered the real-estate tax rate from the current 82 cents to 77 cents per $100 of assessed value so overall revenue would stay the same. The process is called equalization.

Whitley said that it's too early to say what anyone's new real-estate tax bill will be, because a property in one neighborhood might be assessed higher than a similar one in another part of the city.

Cameron's proposed general fund budget is 1.95 percent higher than the current fiscal year's budget. It includes a 2 percent increase for city employees, two new positions, a 15 percent increase in health insurance costs and a 12.55 percent reduction in payments to the Virginia Retirement System.

It also includes funding for the city's newly hired historic preservation planner and storm water environmental manager plus the new public safety radio system and $2.5 million for cash-funded capital projects.

Cathy Jett: 540.374-5407

[email protected]

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