Richmond’s real estate tax rate could be lowered by 1 or 2 cents as city officials begin weighing their response to increased property assessments that are forcing a new look at the rate.
Mayor Dwight C. Jones held a news conference Tuesday to call for a 1-cent reduction from $1.20 per $100 of assessed value to $1.19, which is about where the rate would fall automatically under a state law that requires localities to roll back the tax rate if reassessments cause the total tax levy to grow by 1 percent or more. The city can choose to keep the tax rate the same, according to the law, but only after a public hearing.
“I think that we’re trying to seek a balance and making sure that when we have the opportunity to return something back to the citizens, we’ll do that,” the mayor said. “When we were made aware of the fact that we were going to have additional money because of the assessments, our response was to find a way to return some of that to the people.”
In the latest reassessments dated July, the taxable value of all Richmond real estate rose 1.93 percent, which included a 2.2 percent increase in residential assessments. The reassessments would have brought in roughly $4.5 million in revenue, and new construction figures that won’t be certified until later this year are expected to push that number even higher.
The mayor’s proposal, which would go into effect on tax notices mailed out in January, won’t be the only one under consideration by the City Council.
Councilman Parker C. Agelasto, 5th District, said Tuesday he intends to introduce legislation to give the council the option of setting the rate at $1.20, $1.19 or $1.18. Agelasto said he isn’t advocating a specific rate, but he wants the city to have options.
“In light of all the conversations about funding for our schools, in light of all the conversations about road repairs and this, that and the other, what is the balance?” Agelasto said. “Let the council have that conversation.”
Council members started to converse at a committee meeting Tuesday evening, when they decided to ask to see the mayor’s math and have council budget staff study the implications.
The council seemed tempted to say yes to a lower tax rate, but several people cautioned against making a quick decision to forgo revenue in light of other needs such as school facilities, compensation for police and fire employees, and pension funding.
“It might be good to lower the tax rate, but in doing so, we definitely want to make sure we understand the impact of what we’re doing,” said Council President Charles R. Samuels, 2nd District. “Because there are a lot of issues in the city.”
Samuels said council members usually introduce legislation every year to make a range of tax rates available. Agelasto “beat us all to the punch,” he said.
With new construction figures expected to be certified later this fall, Agelasto said the council could consider going further with the reduction.
Asked if he would consider lowering the rate further, the mayor said he looks forward to discussing it with the council.
“I think that’s something we can have constructive dialogue about,” Jones said. “So if it goes lower — I think that $1.19 is right — but I’m open to discussing lower. I don’t think we should stay at $1.20. I think that it sends a good message to the citizens of Richmond that we’re not just looking to spend money, we’re also looking to save money.”
No matter what city officials decide, legislation to fix a new rate should be formally introduced at the council’s meeting next Monday to meet the stringent public notice requirements for a tax change. The city assessor’s office would need to know the rate by the council’s second meeting in October to have enough time make the change administratively, City Attorney Allen L. Jackson said.
With Richmond’s total taxable real estate valued at almost $20 billion, each cent on the tax rate brings the city almost $2 million in annual revenue. For a residence assessed at $200,000, a 1-cent reduction in the rate would lower the tax bill by about $20.
“I think it should be duly noted that the city of Richmond is considering a tax-rate reduction and other jurisdictions in the metro area have in some way raised taxes,” said Councilman Chris A. Hilbert, 3rd District.
This year, Chesterfield County raised its property tax rate 1 cent to 96 cents per $100 of value. Henrico County kept its real estate tax rate unchanged at 87 cents per $100 of value, but the county enacted a 4 percent meals tax this year. In Hanover County’s most recent budget, the property tax rate was unchanged at 81 cents per $100 of value.
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