By William J. Des Rochers, Fluvanna Field Officer
On February 9th, Fluvanna’s Board of Supervisors considered new taxes as a way to close a potentially large budget deficit and reduce its reliance on real estate taxes as a funding source.
The most contentious issue may be the enactment of a Business and Professional Occupational License or BPOL tax. The tax, long opposed by many in the business community, is employed by half the counties in Virginia and is levied on gross receipts. Supervisors reached no conclusions.
Also, supervisors considered a Meals and Lodging tax, but such a measure would have to be approved by county voters before it could be enacted. Ironically, some supervisors seemed to like an idea, floated by county administrator Jay Scudder, to hire a public relations firm to advocate for approval. Spending taxpayer funds to lobby for a new tax in Fluvanna would be a novel approach for the county.
The tax options were part of a larger FY 2012 budget proposal that currently calls for a four-cent increase in the real estate tax rate, to $.58 per $100 of assessed value. However, the current budget keeps school funding at current levels and does not take into account a potential 1.3 million shortfall in state assistance. No pay increases are planned for county employees.
Each cent of real estate tax provides the county with about $360,000 in revenue so to just fill the operating shortfall for the schools would add an additional four cents to the tax rate. This would equate to a 15 percent increase.
The county has set aside $250,000 to conduct a reassessment in FY 2012. The last reassessment occurred before the real estate market decline, and the county’s Commissioner of the Revenue, Mel Sheridan, has estimated that the county’s current assessed value is overvalued by some twenty-five percent. If accurate, Fluvanna’s revenue neutral real estate tax rate would jump to $.74 over the current $.54.
William Des Rochers is the Fluvanna County Field Officer for the Free Enterprise Forum a privately funded public policy organization. If you find this report helpful, please consider supporting the Free Enterprise Forum. To learn more visit www.freeenterpriseforum.org