MILFORD – Caroline County Administrator Charles Culley Jr. has proposed increasing real estate taxes, property taxes, and water rates as part of the next fiscal year budget he proposed to the Board of Supervisors this week.
His proposed budget, presented to the supervisors at their regular meeting on Tuesday, calls for increasing the real estate tax rate from 72 cents to 77 cents per $100 of assessed value.
Culley recommended increasing the personal property tax rate from $3.50 per $100 of assessed value to $4.30, and he recommended a 12 percent increase in water rates.
The increases are necessary, in part, to pay for a 3 percent raise Culley wants to give county employees as well as employees of the county’s public schools. The additional revenue also is needed to pay more debt service the county must pay in the budget year that begins July 1. Culley also proposed adding a handful of new jobs.
Caroline County’s real estate tax rate has increased each of the past two years, and the Board of Supervisors also increased property taxes a year ago.
Culley’s recommended budget and tax rates are “just a starting place” and will be discussed at budget work sessions over the coming weeks before final adoption, said Supervisor Floyd Thomas, chairman of the board. Tax rates are scheduled for adoption in early April.
The supervisors will set dates for budget work sessions when they meet again Feb. 26.
“A homeowner in the county with a home valued at the average of $160,251 would see an increase of $80.12 per year on his or her real estate tax bill,” Culley wrote in a briefing memo for the supervisors, referring to his recommendation to increase real estate tax rates.
One penny on the real estate tax generates $247,499 in revenue. Culley’s proposed rate of 77 cents per $100 of assessed value would generate an additional $470,674 in the current fiscal year and $941,349 for fiscal year 2013-14. The new rate would take effect with the June real estate tax payments.
Real estate tax rates across the region in 2012 ranged from 52 cents in King and Queen to 90 cents in Spotsylvania while personal property tax rates around the region ranged from $1.90 in Louisa to $6.37 in Spotsylvania.
Culley’s recommendation fund a 3 percent pay raise for school employees would cost $868,000; the 3 percent raise for county employees would cost $381,000.
“This would be the first real raise for county employees in five years,” Culley wrote. County employees have endured pay cuts, furloughs, and increased out-of-pocket costs for health insurance in recent years, he noted.
The county has borrowed millions of dollars since 2005 to finance capital projects, such as Lewis & Clark Elementary School, Bowling Green Primary School, upgrades to Caroline Middle School, and expansion of the wastewater treatment plant, noted Culley.
The debt service on all these loans “will have a significant impact on the FY 2014 budget with an increase of $844,433 from the current fiscal year,” he wrote. The increase in debt service is equivalent to 3 cents on the real estate tax rate.
On top of higher debt service, the county must transfer $1.76 million from the general fund in order to cover the debt service payments of the utilities fund.
The utilities fund has not been self-supporting due to the prolonged housing industry slump; the lack of new home construction has reduced the number of new utilities customers.
In addition, the county must spend close to $250,000 next year to develop new wells, said Culley.
The proposed 12 percent increase in water rates would generate an extra $103,443 in fiscal year 2014.
“This is the fourth increase in user rates in the last four years,” Culley wrote. “Rates for water have increased by a cumulative 27 percent during this time.”
Culley’s budget also calls for several new positions: a full-time water operator, a full-time lab technician for the wastewater treatment plant, a full-time wastewater treatment plant operator, two more social workers, and increasing the human resources manager of the department of social services from a part-time to a full-time position.
Culley’s proposal increases the general fund (county funds) budget by $2.3 million – 6 percent – to $42.4 million in the next fiscal year. His total budget for the next fiscal year, including state and federal funds, amounts to $83.5 million, down $3.6 million – 4 percent – compared to the current budget.
He also pointed to other rising costs. The cost to house juvenile and adult prisoners in regional jails is expected to increase by $168,000, and a program to provide services for at-risk youth and families is projected to increase by $135,658.
Some revenues are increasing slightly while others, such as personal property taxes and public service taxes, are decreasing, according to Culley. Personal property taxes would drop by $1.4 million due to a change from assessing retail to trade-in value unless the supervisors increase the tax rate, he said. Public service taxes are projected to decline by $123,304 in the next fiscal year while local sales taxes are expected to drop by $53,514.
On the bright side of revenues, real estate tax revenue is increasing by $58,137. Business, professional and occupational taxes are expected to increase by $156,937, and recordation taxes will grow by $38,330.
Culley also proposed funding of $1.3 million for capital improvement projects. These include $783,471 for the county share of improvements to the intersection of U.S. 1 and Ladysmith Road, $242,020 to lease-purchase 10 cars for the sheriff’s office, $96,000 to lease-purchase three fire-rescue vehicles, $160,000 to lease-purchase a roll-off truck for solid waste operations, $65,000 to upgrade heating and cooling controls for the Community Services Center, and $25,000 for a van for the department of parks and recreation.