Politics & Government

Alexandria Council Advertises 4 Cent Increase to Real Estate Property Tax Rate

If adopted at the maximum rate, the real estate property tax would result in the average Alexandria residential tax bill increasing up to $314.

Alexandria City Council unanimously voted Tuesday to advertise the maximum residential and commercial property tax rate at $1.038 per $100 of valuation for fiscal year 2014, an increase of 4 cents from the prior year but down from an initial recommendation of a 5.5-cent hike.

Council can settle on any rate at or below $1.038 as it works through the budgeting process, which is scheduled to end with adoption on May 6.

The tax rate on motor vehicle property is proposed to increase from $4.75 to $5 per $100 of assessed value. The rate on business equipment and other types of vehicles is not proposed to change.

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In its budget guidance for City Manager Rashad Young, council asked for an optional 3-cent hike to offset cash capital investments on top of the 2.5-cent increase Young suggested in his proposal released last month.

• See: City Manager Proposes $626.6 Million Operating Budget

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Mayor Bill Euille said on Tuesday he averaged the recommended rate increase of the six councilmembers before coming to the 4-cent suggested rate.

Members generally expressed a desire to stay close to Young’s recommended 2.5-cent increase and to keep operational costs down. Euille said the possible extra 1.5 cents on top of Young’s recommendation gives council some flexibility in determining the operating budget and investment in the city’s 10-year capital improvement plan addressing school capacity needs, facility maintenance and transportation investments.

Councilmembers were more open to investing in cash capital than increasing the operational budget.

“I don’t want to be doing something where we advertise 4 cents and we’re doing something only to cover operational issues,” Councilman Paul Smedberg said.

Councilman Justin Wilson said he was looking at twin goals with the budget—investing in cash capital for infrastructure while also seeking "austerity" on operational spending to set the table for future budgets. He cited a list of cost-cutting recommendations that were suggested but not included in Young’s current proposal that the city could be facing in future budget discussions. Those recommendations include closing Fire Station 201 on Prince Street in Old Town and eliminating crossing guards at city schools.

The city is facing a $31 million shortfall and a sixth straight year of economic challenges.  

“We have some very serious cuts that are going to be coming down the pipe,” Wilson said. “We have some very important decisions to make not only how we’re going to get through this budget but also make things easier for next year and I would suggest that investing in our basic infrastructure is one of the ways.”

Councilmembers Del Pepper and John Chapman said they wanted at least some flexibility to use the tax revenue above Young’s recommendation on operational costs.

Vice Mayor Allison Silberberg said she wanted to stay close to Young’s recommendation, while Tim Lovain said he was nervous to increase the tax rate 4 cents because of how it would strain taxpayers.

If adopted at the maximum rate, the real estate property tax would result in the average residential tax bill increasing up to $314, or 6.9 percent when compared to 2012 real estate tax bills.

Euille said he believed the majority of the additional tax revenue should be dedicated to capital costs.

“It’s tough decision but [the advertised rate] sets the framework for us in the budget process,” Euille said. “We all heard members say they would like to come down on the side of the city manager’s proposed rate when we adopt the tax rate, but to get there… we still have a lot of heavy lifting to do.”

A public hearing on the ordinance establishing the real property tax rate will be held at 9:30 a.m. April 13 at City Hall.

What are your opinions on the advertised real estate property tax rate? Tell us in the comments.


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