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UPDATE: Stoney proposes 9-cent hike to Richmond's real estate tax rate, 50-cent tax on cigarettes

UPDATE: Stoney proposes 9-cent hike to Richmond's real estate tax rate, 50-cent tax on cigarettes

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Richmond Mayor Levar Stoney wants to raise the real estate tax rate 9 cents and levy a 50-cent per-pack tax on cigarettes to improve municipal infrastructure and boost school funding, he told the City Council on Wednesday.

The real estate tax hike would bring Richmond’s rate to $1.29 per $100 of assessed value, restoring the rate the city last imposed on property owners in 2006. The two tax increases would yield $24 million in new annual revenue that Stoney wants to give Richmond Public Schools and use on long-deferred repairs to roads and sidewalks that he said the city can’t continue to ignore. Rising assessments are expected to generate roughly $22 million on top of the proposed property tax hike.

“It’s time for us to have the tough, honest conversations about what it will take to build the city we want,” Stoney told the council before announcing the pair of tax increases on which his budget depends. “It’s time we demonstrate we have the courage and the vision to take the actions required to make Richmond not just a top 10 place to visit, but a top 10 place to live.”

The School Board asked the city for an extra $18 million a year for operations and $21 million for capital needs. Stoney’s plan would cover the operating request and provide $19 million next year for capital maintenance projects.

Superintendent Jason Kamras — who last year proposed a 10-cent property tax increase that gained no traction, even from the mayor — sat in the front row with his cabinet and applauded as Stoney announced the tax hikes. He released a joint statement in support of the mayor’s budget with School Board Chairwoman Dawn Page and Vice Chairwoman Liz Doerr.

“We thank the mayor for his courageous leadership in putting this budget on the table, and we look forward to working with the City Council to now make it a reality,” the statement said. “Our children deserve nothing less and the time to act is now.”

The tax increases were met with less enthusiasm from some members of the City Council, especially 8th District Councilwoman Reva Trammell.

Shortly after Stoney wrapped up his remarks, Trammell lit into him about the hikes, saying they were “not fair” and accusing him of breaking a promise he made as a candidate.

“How could you stand up here before all of us and do this to the people?” Trammell said.

As Trammell spoke, Stoney sat in the front row of the council chambers, smiling. He did not respond to her remarks directly, and left the council chambers soon after.

The proposed budget — which would take effect July 1 if passed — also includes utility rate increases for water, wastewater, stormwater and natural gas. The increases will cost residents $5.82 more per month, Stoney said.

Beyond more funding for schools and roads, Stoney’s budget includes a 3 percent cost-of-living salary increase for city employees, $2.9 million in funding for the city’s Affordable Housing Trust Fund, $965,000 in additional funding for the GRTC Transit System and $485,000 for an eviction-diversion program he announced in January.

The initiatives are a part of Stoney’s proposed $758 million general fund operating budget that will remain balanced only if the City Council backs his plan to raise taxes as residents also face climbing assessments.

The proposal comes on the heels of an effective tax increase for homeowners whose property values rose an average of 8.3 percent this year. The average home value jumped from $228,000 to $247,000, meaning the average tax bill increased by $228. Raising the tax rate 9 cents would add an additional $222 to the bill, making it $3,186.

State law requires localities to consider lowering tax rates to hold homeowners harmless when assessments increase. The council decided against lowering property taxes by 7 cents late last year, the amount that would have been required to keep revenues level as assessments rose.

Richmond’s real estate tax rate is currently $1.20 per $100 of assessed value, the highest in the region. The rate per $100 is 95 cents in Chesterfield County, 87 cents in Henrico County and 81 cents in Hanover County.

Trammell, the 8th District councilwoman, said she took issue with Stoney, who does not own property in the city, proposing the tax hike and utility rate increases. She and 2nd District Councilwoman Kimberly Gray cast the mayor’s proposal as hypocritical.

“When you’re making decisions that will impact other people and not yourself, you should be accountable and be able to explain why you believe it to be good policy,” Gray said.

The tax increase would also burden renters, as landlords pass the cost off on tenants.

Counting Trammell and Gray, four members of the council said after Stoney’s speech that they would not support a real estate tax increase. The others were 1st District Councilman Andreas Addison and Council Vice President Chris Hilbert. Stoney would need a majority of the nine-member council to support his proposal for it to pass.

Hilbert, who represents the 3rd District, said he would not support the property tax hike but would support taxing cigarettes.

Richmond is the only major city in the state without a cigarette tax. Last spring, the council rejected an 80-cent-per-pack cigarette tax proposed by 5th District Councilman Parker Agelasto. Only three council members supported it at the time.

Ellen Robertson, of the 6th District, said she was reserving judgment on the tax increases until she could review the full budget.

This council has raised taxes before. Stoney successfully pitched a 1.5 percentage point increase to the city’s meals tax last year. The hike generated $150 million to build three new schools. City leaders broke ground on them in December.

The council begins deliberating on the budget at 9 a.m. Monday.

(804) 649-6734

Twitter: @__MarkRobinson


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