BRISTOL, Va. — A split City Council rejected two lower alternatives Thursday before voting to trim the city’s real estate tax rate to $1.12 per $100 of assessed value.
The council approved the new rate 3-2 during a called meeting after Councilman Kevin Wingard urged them to consider $1.10 and Councilman Kevin Mumpower offered $1.09. Both voted against the measure.
The approved rate, which goes into effect immediately, is five cents lower than the present $1.17, but represents an “effective increase” because it is expected to generate about $300,000 more for city coffers due to the recently completed citywide reappraisal.
Mayor Bill Hartley called the new rate a move “in the right direction.”
“Some people’s property assessments went up, some went down but the council is moving the rate in the right direction,” Hartley said. “Five cents is a good move but to go lower right now given the fact we are still in the middle of a pandemic, we’re looking at revenues that aren’t back to where they were just over a couple of years ago.”
City tax revenues fell about $1.5 million during the past year due to effects of the pandemic.
“We don’t want to cut too much and put ourselves in a hole,” the mayor said. “When you look back that’s what councils did before. In 2010 they went down from $1.05 to 94 cents and they had to hit TANS [tax anticipation note short-term borrowing] to cover that. I think this is a step in the right direction.”
Vice Mayor Anthony Farnum said he hopes the council can ultimately reduce the rate back into the 90-cent range.
“I think it takes a long time to turn around a big ship heading in the wrong direction, but I think we’re doing that,” Farnum said. “As we vote on this tonight to lower the rate from $1.17 to $1.12 that, going forward, we all make sure we keep this in the forefront of our minds. I’d love to be on the group that lowers it a few more cents, then a few more cents.”
One cent of real estate tax generates about $100,000 and the proposed fiscal 2021-22 budget was built on the $1.12 rate, so approving a lower rate would mean revising that budget.
“We can’t go to $1.08 because we’d be in the negative; $1.10, we’re in the positive. We don’t need to go to $1.12,” Wingard said. “I would like to see this council set the rate at $1.10. We have got to stop taxing and charging fees and taxes at the degree we do in this city. We’ve got to grow this city with new revenue, new tax base, not keep imposing it onto our people who live here and want to stay here. And we just make it hard for them.”
In pushing for $1.09 rate, Mumpower said the council should find ways to cut at the proposed $54.8 million general fund budget.
“We’ve kind of got the debt refinanced but, on the expense side, I think we still slipped back a bit. We were very aggressive at the beginning,” Mumpower said. “I think we’re a few pennies off. I think there’s some tightening on the expense side that would allow the tax rate to go back.”
Councilman Neal Osborne said he too hopes the rate can eventually come down.
“I don’t see a place where we can make cuts,” Osborne said. “I don’t know where we would cut $300,000. … I’d like to see it less than a dollar but I think it’s about the place we should be at this point.”
The council is scheduled to host a public hearing on the budget April 27 and approve the spending plan during its two May meetings.
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