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Posted April 12, 2013 | comments Leave a comment

Shenandoah County to hold hearing on proposed budget, tax hike Tuesday

By Alex Bridges

Shenandoah County residents may feel déjà vu as the Board of Supervisors moves toward a likely tax increase.

The board will hold a public hearing on the proposed fiscal 2014 budget at 7 p.m. Tuesday. Supervisors also will hear comments from the public on proposed increases in the county's main tax rates.

The proposed budget calls for a 6-cent increase in the real estate tax rate. Such a change would generate $2.7 million; each penny equates to an additional $450,000 in revenue. The tax bill on property assessed at $200,000 would increase by $120 under the change, from $1,020 to $1,140.

Supervisors faced a similar situation last spring when then County Administrator Douglas Walker recommended the board raise the real estate tax rate. The county needed the extra revenue to cover the cost of a state-mandated increase in what employees pay toward their retirement and other expenses.

The board chose then to advertise a 6-cent increase in the real estate tax rate. In the end, supervisors approved increasing the rate by 3 cents, bringing the levy to 51 cents per $100 of assessed value.

The proposed budget also assumes a 35-cent increase in the personal property tax rate to $3.50 per $100 of assessed value, which can generate an additional $1.08 million, or $31,000 per penny.

The county needs to increase the tax rates on real estate and vehicles in order to balance a budget that calls for spending more in all areas of government and education, according to county officials. In addition to a 2 percent salary increase, the proposed budget includes money to create a handful of new positions. The spending plan includes money to cover a small increase in health insurance.

While the board would need to raise the tax rates to balance the budget as proposed, increasing the levies by less than recommended should still give the county additional revenue. An increase of 3 cents would give the county approximately $1.35 million in additional revenue.

As Budget Manager Garland Miller explained in interviews this week, the county expects to receive approximately $571,330 in additional revenue from all sources, including real estate taxes. But the county began the fiscal year with a budget that used $645,000 from savings, Miller said.

Even after eliminating $1.7 million in departmental funding requests, Walker presented a budget that called for increased spending for almost all parts of government. Walker also recommended the tax increases to do so.

Whether the board decides to raise tax rates or use more from the county's reserves to fund the increased expenses remains uncertain. Walker advised the board before he left in late March that the county should no longer rely on the reserve fund to fill budget gaps. Some supervisors have agreed.

But since budget discussions began earlier this year and even after Walker presented his budget, supervisors have made no recommendations as to possible cuts in the proposed spending plan. A few supervisors said at their work session Tuesday that the board should wait until the public has a chance to speak at the hearing before commenting further on the budget and tax rates.

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

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