Tax rate unchanged despite calls to ease burden on residents

By: Michael Campbell | Twitter: @PGJournal
Posted: May 20, 2020 | 12:30 p.m.

Supervisors split vote on county’s FY2021 rateS

PRINCE GEORGE – The county’s tax levies are slated to remain the same for the upcoming fiscal year, leaving some residents frustrated as their pleas for relief in the wake of increased assessment values went unanswered as supervisors narrowly approved keeping real estate and other levies at their current levels. 

Voting 3-2, with Supervisors Floyd Brown, Jr. and T.J. Webb as the pair of dissenting votes, the Prince George Board of Supervisors adopted its tax rates for the 2021 fiscal year as part of its required annual financial planning process during its regular meeting last week. 

With their action, the county’s real estate tax rate will remain 86 cents per $100 of assessed value, unchanged from the last several fiscal years. Along with real property, mobile home and tangible property will also remain fixed at 86 cents, with personal property being levied at $4.25 and machinery and tools staying at $1.50 per $100 of assessed value. 

Their action last week will allow for personal property tax bills to be generated and eventually paid by county taxpayers by June 26, which represents a shift of two weeks following action by supervisors last month to provide relief to residents amid the COVID-19 pandemic. In addition, the board also suspended penalties and interest for late payments of those taxes through August 31.

Regarding real estate taxes specifically, some taxpayers have been vocal in their requests to supervisors to allow the county’s real property rate to fall back to its equalization rate as county property values continue to rise. Last year’s equalization rate was 83 cents while this year’s proposed equalization rate was 80 cents, a six-cent drop from the county’s current effective rate of 86 cents. 

While tax rates have remained unchanged, annual reassessments of county property have caused some bills to steadily rise. This year, the county saw a 7.3 percent rise in real property values net of new construction and improvements. 

In April, supervisors did not act on allowing the county’s real estate tax rate to regress to its equalization rate of 80 cents, advancing to the next phase of the budget building process, the advertisement of an effective tax rate. That rate was 86 cents, recommended by Prince George County Administrator Percy Ashcraft as part of his proposed budget for the coming year.

The month prior, supervisors Brown and Webb both voiced support for lowering the county’s real estate tax rate below the 86 cent threshold, potentially to the 80 cent equalization or somewhere in between the two figures. 

With COVID-19 carving out a significant chunk of revenue from the county’s budget to the tune of an estimated $1 million next year, including a nearly $350,000 drop in real property revenue, it was recommended the county remain at its 86 cent rate for FY2021, with any reductions to that rate have significant fiscal impacts to both the county and the school division, who share several revenue streams that makes up the county’s annual local contribution to Prince George Public Schools.

According to county finance data, COVID-19 impacts are expected to cost the county roughly $1.07 million in revenue, with the schools standing to lose $351,033 in local funding as a result of the revenue sharing memorandum of understanding.

Any reductions to the real estate tax rate would’ve extracted another $280,000 for each penny of the tax rate. With a one penny drop, the county would lose $161,065 and the school district would lose $118,994.

Going out further, had the county opted to regress to the equalization rate of 80 cents – a six cent reduction – nearly $1.7 million in revenue would evaporate from the county’s budget. Taking the MOUt into account, over $966,000 in county funding and over $713,000 in school division funding would have been eliminated.

While no one spoke during the public hearing on the tax rate last week, William Steele expressed frustration at the county’s decision to not consider lowering the tax rate during a work session in April.

“What staff needs to say is, ‘At 86 cents, we are requesting the taxpayer [pay] an increased tax bill’ because that is what will happen if you stay at 86 cents,” he remarked. “The county doesn’t need another $3 million. I have shown where we are wasting and where the budget can be cut.”

Steele would voice his dismay and further frustration after supervisors narrowly approved the tax rate during a later hearing on the county’s proposed budget.

“I am heated because I cannot believe we just did this backwards and in my years of government, I have never seen it work this way. We already tell the taxpayer, ‘Hey, we are going to steal more money from you,’ then you worry about the budget,” he questioned. “Why go through the exercise, you have already taken the money from the taxpayer. You just raised our tax bills.”

“You heard [County Administrator Percy Ashcraft] say one in ten people are receiving  unemployment and yet, you come up and raise the tax bill on us? I can’t believe, with everything going on, we just raised our tax bills by nine percent on each individual. Gentleman, that is a slap in the face,” Steele said. 

Brown, who had advocated for lowering the tax rate over the last several weeks and discussed calls he has received from taxpayers struggling to make ends meet amid higher bills and the economic fallout associated with COVID-19, said he couldn’t vote in favor of keeping the rate at 86 cents last week.

“I know we have gone over the budget modifications and, as a result, that drove out the [real estate tax] rate,” he said. “My commitment was wanting to see the tax rate come down under 86 cents. I have looked at a lot of the options that were presented as to how we could get there but, there isn’t time to spend doing that in order to get tax bills out.”

“It was my commitment to get it below [86 cents] and, probably for that reason that we are still at 86 cents, I am just saying on-the-record, that I will probably vote ‘no’ tonight,” he closed, with the vote ultimately resulting in a 3-2 vote with both Brown and Webb dissenting.

During its second of two public hearings last week, the county also presented its revised FY2021 proposed budget, featuring the removal of planned increases in business license, or BPOL, and permit fees and the county’s water and sewer rates.

Through the axing of a number of projects and proposed new positions, including two new police officers and a deputy fire and EMS director, nearly $1.4 million was cut from the county’s general fund budget and $3.5 million from the total budget in comparison to Ashcraft’s initial budget presentation in February

Even with the cuts, the county still plans a capital reserve transfer of $1.2 million to cover the costs of over $38 million in capital projects expected to be undertaken during the upcoming fiscal year, highlighted by the construction of a new Walton Elementary School at nearly $32 million. 

Also included in the county’s capital projects are plans for a generator at Prince George High School, an expansion of the county’s fleet garage bay, along with school bus, police, and county vehicle purchases.

According to the county, supervisors will evaluate postponing renovations to Fire Station 1 until FY2022 and the including Zoll X Series Monitors/Defibrillators in their CIP “upon budget adoption,” set for May 26.

Residents can view the county’s budget documents on its website, Taxpayers can still share comments on the budget all the way up until next week’s public hearing, where public remarks can be submitted or shared in-person or through the county’s digital meeting host Zoom.

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