By Alex Bridges
WOODSTOCK -- Over the years, real estate tax revenues have risen for Shenandoah County even as the rate stayed the same and the housing market has struggled.
The county could collect more taxes if it increased the rate by another 6 cents as recommended by County Administrator Doug Walker. The rate of 57 cents per $100 assessed value as proposed would mark the second increase in two years.
But as Walker told members of the Board of Supervisors at a work session this week, the county would need to raise the rate to cover increased spending for the next fiscal year. His proposed budget calls for a cost-of-living increase for staff and money to hire more personnel for certain departments as well as one-time capital purchases and projects.
Budget Manager Garland Miller presented information outlining the county's revenue picture over the past 10 budget cycles to put into perspective upcoming funding needs.
As Supervisor David Ferguson pointed out, the county spends approximately 70 percent of its revenue on public safety and the school system.
"It's a hard decision," Ferguson said. "You've got so much revenue and so much demand for it and I cannot give ... anybody anything that I don't take from somebody else, and that somebody else is the taxpayer."
Figures from audited data show the county collected approximately $14 million in real estate tax revenue in fiscal year 2003. By fiscal 2007 that amount had increased steadily to approximately $18 million.
Even though the increase in revenue slowed in subsequent fiscal periods, the county continued to collect more money as the tax rate remained at 49 cents per $100 of assessed value. During the height of the economic downturn, the county saw the revenue stream increase from $18 million to almost $20 million collected in fiscal 2011.
Supervisors approved a 4-cent increase in the real estate tax rate for fiscal 2012 - half the amount Walker had recommended. Revenue increased from just under $20 million in fiscal 2011 to approximately $21 million.
Miller's presentation showed a less predictable revenue stream from personal property taxes. For several years the county collected more money as indicated in its audit than expected in the budgets. The revenue stream continues to rise, though not as sharply as it did in past fiscal years.
At the same time, the amount of revenue collected from businesses and industries under the machinery and tools tax remains relatively flat. Miller explained this is a positive because the county uses a depreciating scale when collecting the tax. The value of equipment decreases as it ages and thus the county collects less revenue for the machinery. If that amount has remained at least flat over the past several years it shows that the commercial sector is likely buying new equipment or the county is seeing more investment by businesses.
Vice Chairman Dennis Morris reacted when members brought up the fact that the Virginia General Assembly has tried to eliminate the machinery and tools tax as a source of revenue for localities.
"It would break our back," Morris said.
Chairman Conrad Helsley noted that the topic comes up in the fall and winter as the board hears of the continuing attempts to take away the funding source.
Meanwhile, state revenue continues its downward trend since reaching a peak in fiscal 2008 of approximately $8.25 million. The county received approximately $7.5 million in fiscal 2012 - a loss of about 9 percent in five fiscal periods.
Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or firstname.lastname@example.org