FRONT ROYAL — Citizens can share their thoughts regarding a proposed 2.5-cent real estate tax increase during a public hearing at the Town Council’s 7 p.m. meeting today.
If the hike passes, the real estate tax would increase from 13.5 cents per $100 of assessed value to 16 cents per $100 of assessed value.
Town Finance Director B.J. Wilson previously explained this would result in an annual tax bill on a $200,000 home increasing from $270 to $320.
The town can pass an increase lower than the rate advertised for the public hearing but cannot go higher.
The town has proposed the tax increase to help fund the Front Royal Police Department’s new $10.2 million headquarters.
The town needs more money than it previously thought to fund the headquarters, as officials previously believed that the Front Royal-Warren County Economic Development Authority had closed on a deal through the New Markets Tax Credit Program to fund construction.
Wilson previously said this loan would have allowed the town to make interest-free payments of $180,000 for seven years. After that, he said the town would have refinanced the remaining balance.
According to a council resolution, however, it turned out that former EDA director Jennifer McDonald misrepresented to town officials that the loan had been closed.
The town has since considered other financing options for the police headquarters such as a 20-year loan that will cost an estimated $691,548 annually with total interest of about $4.5 million.
Councilman Letasha Thompson noted that while a 2.5-cent real estate tax increase makes sense, “the EDA is what’s throwing us off” and the town should not be in this situation.
With the recent revelation that ITFederal is not expected to open on the Avtex Superfund site, councilman Jacob Meza suggested that the town redirect funding for a pump station and road being built at the location to the police station.
Mayor Hollis Tharpe responded that the infrastructure the town is funding at Avtex is also for other future businesses at the site. He said no business would open there without the proper infrastructure and if the town follows Meza’s suggestion it would merely be “kicking the can down the road.”