Tax hikes likely as budget deadline nears
STRASBURG – As Town Council gets closer to finalizing the 2016-17 budget, it’s likely that property taxes will not be affected, but meal, lodging and utility taxes will face hikes.
Council members debated funding the Northern Shenandoah Industrial and Business Park via tax increases on either meals, lodging, utilities or real estate during a council work session Monday evening.
The council came to a general consensus to raise meal taxes by 1 percent, lodging taxes by 1 percent, and utility rates by $1 per month for residential users and $10 per month for industrial or commercial users.
Before the changes, Strasburg controlled a budget of $7,157,716. If the council implements the proposed changes, the budget will increase to roughly $7,357,716.
“I prefer scenario one,” said councilman Don Le Vine, referring to the meal and lodging increases. “It puts most the burden on visitors and tourists, not residents.”
Councilman and Mayor-elect Rich Orndorff Jr. said the tax increase will be a blow to restaurants, which are likely to pass the cost onto consumers. He did, however, agree to the 1 percent increase.
Along with the tax increases, the council also debated whether or not to give roughly $26,000 to Shenandoah County to market tourism to the county at large, or to use the money to draw tourists directly to Strasburg.
According to information provided by county officials, Strasburg contributed $28,747 of its $196,534 budget in the current budget. Using data from the county’s 2014 findings, Strasburg’s 2014 allotment to the county yielded $5.6 million in local taxes generated by tourism, a 28:1 return on investment.
Likewise, in 2015 Strasburg (not Shenandoah County) earned mentions in publications such as The Washington Post, Huffington Post and the Richmond Times.
While some council members said donating to the county is more likely to benefit other nearby towns such as Woodstock, Front Royal and Winchester, they ultimately agreed to allow the county members to present further information at an upcoming meeting.
Some on the council felt it would incite conflict to pull money out from the county while it is so close to finalizing its budget.
“I’m not saying I’m not in favor of us keeping it,” Orndorff said. “I’m just not sure we should do it at the eleventh hour to the county. That is not a very good faith way of doing it.”
Le Vine agreed, saying it’s worth hearing the county out on its argument and deciding then and there.
Not all on the board were swayed toward providing the money for the county. Councilman Robert Baker said he is concerned the money will be a flashy waste with little substantive value.
“Are we just feeding the wheels of government machinery? Or is anything occurring?” Baker asked. “Are we just paying people money to do jobs to do something that are not of any true value? If so, we need to rethink it.”
Looking forward, the council will reconvene for a public hearing at its work session June 6, before finalizing the budget at its meeting June 14.
Contact staff writer Jake Zuckerman at 540-465-5137 ext. 152, or firstname.lastname@example.org