City Council may now raise tax rate

Published 8:20 am Wednesday, May 19, 2010

FRANKLIN—The City Council voted Monday to advertise a real estate tax rate of 79 cents per $100 of assessed value for next year—an increase of two cents over the current rate.

However, several council members said they would not support a tax increase in the actual budget.

If the tax rate increase were implemented, yearly taxes due on a property valued at $200,000 would increase from $1,540 to $1,580.

The council voted 5-1 to allow the advertisement of a 79-cent tax rate. Councilwoman Rosa Lawrence didn’t attend the work session and Councilwoman Mary Hilliard cast the lone dissenting vote.

“I will not support a tax rate increase,” Hilliard said. “It will stay at 77 cents.”

Mayor Jim Councill, who expressed concern at a work session last week about the lack of funding to some outside agencies and travel expenses for employees with training needs, said a rate of 79 cents would essentially be revenue neutral, considering the decline in real estate values.

Following dramatic increases in real estate values in 2008, the council reduced the tax rate from 90 cents to 77 cents in an attempt to remain revenue neutral.

When the city’s proposed budget is advertised in Friday’s edition of The Tidewater News, the 79-cent rate will appear, but the proposed budget, built with a rate of 77 cents, will remain as is. The higher rate is being advertised to give the council a cushion as it continues to work on the budget.

“We cannot raise the rate after it’s gone to public hearing unless you go back through the whole process,” Councill said.

However, the council can choose to reduce the tax rate after the public hearing.

Councill noted the ballooning cost to house inmates at the Western Tidewater Regional Jail and increased costs for employee insurance.

“That’s $430,000 in additional costs to the city that we can’t control,” he said.

Vice Mayor Raystine Johnson voted to allow the advertisement of the 79-cent rate, but said she would oppose a tax rate increase. Councilman Barry Cheatham said he would only support a rate increase if the revenue were earmarked “for some very specific things,” not including funding for travel expenses or outside agencies.

The city’s budget public hearing is set for June 7 and adoption is scheduled for June 14.