Spotsylvania County is doing well, with revenue projected to increase by $17.1 million this year, according to a presentation of the recommended budget for fiscal year 2023 last week.
This opens the door for supervisors to increase spending without raising property or estate tax rates in the budget that takes effect July 1.
County Administrator Ed Petrovich told the Board of Supervisors that county revenue typically grows by about $5 million to $6 million a year. He told the board that there were several reasons why the revenue projection was so rosy.
Petrovich reported that property revenues “underperformed expectations last year.” But taxes on personal property, sales and meals “have immensely exceeded expectations during the pandemic.”
The increase in revenue from these taxes lowered the projection for the fiscal year beginning July 1 by $5.8 million. An increase in the value of used cars added another $2.2 million to the personal property tax projection.
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The county’s recently reassessed real estate values are up for the 10th straight year, increasing by $2.6 billion from 2021. This spike boosted projected revenues by another $3.8 million, even at a rate of equalized taxation.
The county also received a federal grant to hire 18 new fire and rescue employees, which added $1.3 million to projected revenue for fiscal year 2023. The proposed spending plan calls for the use of funds of the county to add 13 positions in the sheriff’s office and three additional fire and rescue jobs.
The recommended budget would maintain the personal property tax rate at $6.35 per $100 of property assessment. The recommendation would establish an equalized property tax rate of 73.77 cents per $100 of assessment, down from the current rate of $80.94.
The total recommended operating budget for 2023 is $622.3 million, up 15.9% from the current fiscal year.
Education represents 46% of the budget. Of the other nine categories, public safety and capital projects also consume a significant portion of the remaining funds at 12% each.
The recommended budget uses the remaining $15 million of the fiscal year 2021 budget for capital projects, eliminating “the need to borrow for general projects in fiscal year 2023,” according to a budget summary.
Under the proposed budget, the county would add 52 positions at a cost of $4,474,409.
The recommended budget also includes $26.5 million in US federal bailout funding.
Petrovitch recommended using a portion of those funds for sheriff’s office bonuses, which had been previously approved, as well as bonuses for other county employees, totaling $1.9 million. The remaining $24.1 million would go towards broadband expansion ($7.6 million) in the Berkeley and Livingston districts, as well as processing plant expansion and upgrades Motts Waters ($16.5 million).
Petrovich said these measures will allow the county to avoid borrowing money for these projects, saving about $13.5 million.
The recommended budget includes water and sewer rate increases, which have been delayed for the past two years during the pandemic. Similarly, the recommended budget includes increases in items such as construction and zoning fees, as well as inspection, plan review and other service fees. Those fees are four to five years “behind the actual costs,” Petrovich said.
The corporate tangible property tax rates that were lowered in this year’s budget remain unchanged in the recommended budget for next year.
Petrovich said the recommended budget “assumes level funding” of $132.28 million for education, but noted that the school board and the recently appointed acting superintendent have yet to finalize their budgets.
He told the board that the school system should get additional federal funding and $27 million in additional state funding, including $8.9 million dedicated to capital projects.
Petrovich warned that changes could be made by the new governor and state lawmakers.
Other meetings, including a public hearing, are scheduled before the board vote on the budget.
The public hearing is scheduled for March 31. The council can approve the budget no earlier than April 8.
Since the supervisors had their first glimpse of the proposed budget, there was little discussion. But supervisor Chris Yakabouski had a few questions and comments.
He noted that “income is flowing in and we are spending it as fast as it comes in” and wondered what role last year’s tax increases have played in the current situation. He also questioned the county’s approach to education spending, saying the county should take the same approach with schools as other parts of the budget.
Yakabouski also wondered if county residents would pay more property taxes just because the value of used cars had gone up.
Petrovich said it was unclear if that was the case, but staff would try to come up with an answer.
Scott Shenk: 540/374-5436