Manager recommends Franklin tax increase

Published 10:29 am Wednesday, June 4, 2014

FRANKLIN—To balance the budget including expenses beyond the city’s control, City Manager Randy Martin has recommended to council that they raise the real estate tax rate 6 cents — 2 cents higher than the “revenue neutral” amount.

Following the property reassessment that was completed in late April, Martin talked about a revenue neutral tax rate increase that would approximately allow Franklin to recoup the money it collected in 2013-14. The 94-cent of $100 value rate still left the city approximately $4,000 behind.

On top of trimming $1,011,262 in departmental requests, Martin said an additional 2-cent increase would be needed to balance the budget. This brings the tax rate up to 96 cents per $100 of value.

Martin cites the three big drivers for the increase as being the property assessment itself, which would cost the city $227,685 in revenue if no tax increase is enacted. The other drivers are the $280,345 increase in administrative costs at the Western Tidewater Regional Jail, and the school debt fund, which is increasing by $172,020.

Martin and Mayor Raystine Johnson-Ashburn wanted to emphasize that despite an increase in taxes, single-family unit owners would pay less than they did last year. Martin clarified that there are exceptions, such as an owner who did work on his or her home that increased the property value.

The city manager also said that regardless of whether council improves the tax increase, multi-family units and commercial properties, which both went up in value in the reassessment, would carry more of the tax burden than in previous years.

Using a $170,000 value as the base. A single family unit’s value would have decreased to $162,605, and they would pay $1,468.8 at the 96-cent increase. That’s $61.2 less than the same homeowner would have paid in 2013-14 at the 90-cent rate.

A multi-family unit worth $170,000 in 2013-14 would go up to $187,000 in value. An owner would pay $1,795.2 based on the 96-cent rate. That’s $265.2 more than he or she would have paid in 2013-14 at the 90-cent rate.

Commercial owners with properties valued at the hypothetical $170,000 in 2013-14 would see their property values increase to $185,300 due to the reassessment. They would pay $1,778.88 in taxes at the 96-cent rate, which is $248.88 more than he or she would have paid at the 90-cent rate in 2013-14.

Ward 5 Councilwoman Mary Hilliard said sometimes a tax increase cannot be helped due to a decrease in property values due to a reassessment, but she urged her fellow council members to remember to lower the rates when a reassessment goes in a more positive direction.

“Once we raise them, it’s hard to lower them again,” she said. “But it is important to keep that in mind next time property values go up, to help our citizens out.”

The 96-cent rate compares favorably to area cities, with the exceptions of Emporia and Virginia Beach, which are at an 85-cent and 93-cent rate respectively. The highest area rate is Portsmouth at $1.27.

Locally, Isle of Wight County is at an 85-cent rate and Southampton County is at a 77-cent rate. Suffolk’s rate is $1.03 per $100 of property value.

City Council will vote on the budget on Monday, June 9 at it’s regularly scheduled 7 p.m. meeting at City Hall.