Warren County might raise taxes to balance budget

Warren County officials found a way to close a revenue gap in next year’s budget through a tax increase.

County Administrator Doug Stanley presented more information to the board at a work session on the fiscal 2016 budget Tuesday that showed how officials can balance the budget. In addition to trimming spending requests and eliminating some new positions, Stanley proposed an increase in the real estate tax rate to plug a $3.1 million shortfall.

The board will hold a special meeting March 24 to decide on a draft budget to advertise for a public hearing, Stanley said Wednesday. The county will also need to advertise a slate of tax rates possibly to include a levy of 61 cents per $100 of assessed value on real estate. The board can adopt tax rates equal to or less than those levies advertised.

Board Chairman Richard Traczyk said Wednesday the cuts were made in the “obvious places.” Traczyk noted that the board had promised to support pay raises for employees. Between now and March 24, county officials and the board will continue to tweak the budget and find ways to reduce spending.

“Obviously none of the board members want a tax increase,” Traczyk said. “We got that down quite a bit from where it was.

“But it’s still not at an acceptable level,” Traczyk added. “But, as I said, if we want to do the things we had talked about doing … we’re just going to have to look at that 3-cent increase and that’s unfortunate.”

The public will have a chance to speak about the proposed budget and tax rates at the hearing April 14. The board is expected to adopt a budget and rates April 21.

Traczyk commented on the benefits of spreading out tax increases over time as the county has done.

“If you totally ignore increases that are going to be essential, what happens is, later on, you get an outrageous tax increase and that’s just not acceptable at all,” Traczyk said.

A small increase shouldn’t affect homeowners and families as much, but will be an increase nonetheless.

“It’s a tax increase and, as a Republican, we all grind our teeth when it comes to tax increases,” Traczyk said. “But sometimes it’s necessary and you just have to determine, through the public hearings, whether the public wants to support the items that we’ve got listed for the increase.”

While 61 cents is the current rate, the average real estate value increased almost 6 percent in the county in last year’s assessment. The county would need to reduce the rate to 58 cents to equalize the levy.

Each penny on the rate generates approximately $404,000. Stanley proposed that the board set the tax rate at 59 cents with the intention of using the extra money to help cover the county’s share of the operational costs of the Rappahannock-Shenandoah-Warren Regional Jail.

The county could raise the rate another penny, to 60 cents, to generate revenue that would help cover the estimated $1.5 million cost to open the new middle school in 2017, Stanley explained. Revenue generated by raising the rate to 61 cents would fund salary increases for county employees.

The proposed budget at the current tax rates shows revenue of $66.04 million but expenses of $69.19 million. The county should use $740,000 from reserves to cover one-time expenses, $590,000 of which would pay for several capital projects, Stanley proposed.

The county would also spend $500,000 from the special projects fund balance toward the local share of the debt on the regional jail. Stanley also proposed reducing by $279,000 the amount the county would use to offset an expected loss in education funding. The county also learned since last week that health and dental insurance costs will increase by 5.3 percent, rather than 10 percent as estimated in the earlier projections, reducing the expense by almost $300,000.

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