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Posted March 4, 2013 | comments Leave a comment

Strasburg leaders talk budget, annexation

By Alex Bridges

Strasburg could boost its coffers next year if the town annexes the adjacent industrial park, officials say.

But some members of Town Council on Monday warned against including the anticipated additional tax revenue in the fiscal 2014 budget until annexation occurs. Town Manager Judson Rex and Finance Director Dottie Mullins presented preliminary assumptions and figures for the next budget cycle. The assumptions included the anticipated revenue that would come from taxes levied by the town on the businesses in the North Shenandoah Industrial Park.

Councilman John "Red" Hall Jr. warned officials not to include funding in the budget not guaranteed. Hall compared the issue to a person who spends a pay raise before receiving the money.

Councilman Scott Terndrup echoed Hall's concerns.

"So I'm worried that you're basing a base budget with a half-year impact in there when there's not a decision made," Terndrup said.

Rex recalled council members had, at a work session with the Shenandoah County Board of Supervisors, an interest in the town annexing at least part of the park.

"If I can be frank, I think we'd be crazy not to annex at least the existing businesses there for the sake of bolstering our revenue and giving us some revenue to reinvest back into the park," Rex said.

Mayor Timothy Taylor noted the need exists for council to decide soon whether or not to annex the park so officials can craft a budget that would include the anticipated revenue.

A 15-year moratorium on the town's ability to annex the site ends in June. The town council could approve annexation of some or all of the land in the park by the end of the year. As Mullins and Rex explained, the town could begin collecting various taxes from the industries next year for six months of the budget cycle.

The presentation from Rex and Mullins shows a financial plan that would reflect an increase in spending from $4.04 million in the current cycle to slightly more than $4.3 million. Balancing the budget would require the town to take approximately $45,000 from reserves.

Without the additional tax money from the industrial park, Rex and Mullins advised town revenues would remain flat in the next fiscal cycle. The park would give a boost to the town by way of the machinery and tools tax, Mullins said. The town would, in one billing, seek payment for the first six months of the cycle, Mullins said.

Councilman Don Le Vine noted the connection between the park and revenues.

"So when we think of annexation, without it we have no more money; with it we have some more money," Le Vine said.

Councilwoman Sarah Mauck expressed concern that the town would in fact begin taxing the businesses in the park immediately. Mauck added that the town would impose its tax rates on top of the levies already collected by Shenandoah County.

But Councilman Rich Orndorff Jr. noted that the major industries inside the park have known for years this would occur. Mauck said some businesses started operating in the park after the town and county entered the agreement and their operators may not know of the deal or that Strasburg could impose additional taxes. Orndorff recalled other annexations that resulted in residents being taxed twice.

"I don't want to harm the businesses we have," Orndorff said. "But also they need to be treated in like fashion to our residents."

Contact staff writer Alex Bridges at 540-465-5137 ext. 125, or abridges@nvdaily.com

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