Three dueling proposals for Richmond’s real estate tax rate came before the City Council’s Finance Committee, and three made it out without any recommendation for the full council to act.
All three, including two that would reduce the rate, would have increased tax bills for many Richmond homes next year after this year’s average 13% increase in real estate tax assessments. The amount people pay in taxes is based on the rate and the assessed value.
Finance Committee Chair Michael Jones said it would be wrong to recommend any of the three without knowing how any would affect the city’s ability to pay for services. So it will be up to the full council to decide between keeping the rate at $1.20 per $100 of assessed value, or cutting the rate to $1.16 or $1.10.
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The $1.16 rate would mean a $3,770 annual tax bill, while the $1.10 rate would mean an annual tax of $3,575.
If that same home had appreciated as much in value as the citywide average 13%, it has been paying an annual tax of $3,451.
“Right now, the administration can’t tell me what would be cut and what the impact would be,” said Jones, complaining that a presentation detailing Mayor Levar Stoney’s proposal to keep the rate at $1.20 came too late to give the committee time to study it.
The mayor will also propose a one-time tax rebate equivalent to 4 cents per $100 of value to give taxpayers some relief, said Chief Administrative Officer Lincoln Saunders.
But it would be a bad idea to cut the rate now, he added.
With a recession looming, that could put the city at risk of cutting services or raising the tax rate as real estate values tumbled — exactly what happened to several Virginia cities after the Great Recession of 2009, he said.
This year’s sudden upsurge in inflation, and the city’s hopes to bring its out-of-sync budget-writing and tax-assessment cycles in line, meant the impact of a rate cut now was all the more uncertain, he said.
Councilwoman Kristen Nye, meanwhile, proposed cutting the rate by 4 cents, to $1.16 per $100 value, noting that the current budget was based on a spring forecast that this year’s reassessment of real estate would show a more modest 9.25% increase.
“We said we’d budget at 9.25 and we saw 13%. We can afford 4 cents. That’s where we started out our budget. I feel it is fair. I think we need relief,” she said.
Jones said he had suggested a $1.16 rate when the council considered the current budget this spring and that the budget would have been balanced at that rate.
“But I know if there are cuts, my district is one of the ones that sees the worst of them,” he said.
Councilwoman Reva Trammell proposed a sharper rate cut to $1.10, noting that it was still 3 cents more than the $1.07 rate that would keep city revenue flat next year.
“We’d still have 3 cents … our taxes are way too high,” she said.
“People think we’re being selfish … that we’re greedy, greedy, greedy,” Trammell said.
This year’s assessment jump is the latest in a series that have sent many residents’ tax bills soaring.
Janice Carter-Lovejoy told the committee that her real estate taxes have increased 65% since buying her home in 2017.
“People want to stay in the city and embrace the city’s improvements,” she said. “Don’t push us out.”
Deborah Fisk said most of her neighbors have had assessments rise 22% in the latest round.
“We are hurting terribly with the assessment and the rates. You put undue pain in families that are really hurting,” she said.