2013-02-27 / Front Page

Supervisors clash over potential tax hikes

By Michael Buettner

Gecker Gecker Two members of the Board of Supervisors clashed last week over how to fund a program of overdue upgrades at county schools.

Midlothian District Supervisor Dan Gecker proposed a possible increase in the real estate tax rate and Dale District Supervisor Jim Holland advocated a referendum to create a new tax on meals at restaurants.

Both supervisors agreed that the plan to spend about $250 million on school revitalization is needed.

At a meeting of the board’s Budget and Audit Committee, Gecker said the current Board of Supervisors had “inherited … a considerable backlog of deferred maintenance” at county schools.

Largely because of a lengthy economic downturn, the county has continued to put off spending on maintenance and replacement. Now, Gecker said, “we’re talking about whole facility replacement.”

County Administrator Jay Stegmaier confirmed Gecker’s summary of the situation and said that if the board doesn’t fully fund the current revitalization plan, “you will be doing to a future board what was done to you.”

Stegmaier Stegmaier Holland stressed the importance of education to the county’s economic health. “When I think about education, I think about job training, I think about jobs,” he said.

On a personal note, Holland recalled the death of his mother 20 years ago and the fact that she had only an eighth-grade education.

“She wanted to be a nurse,” he said, but because of the lack of educational opportunities, “she never saw that dream come true.”

Holland said the board needs to “step up and make bold decisions” to support school revitalization. He said he would urge the board to approve a referendum that would let voters decide whether to enact a new tax on meals in restaurants.

Holland Holland Gecker, however, suggested that a referendum on a meals tax might not answer the county’s need. “I’m not sure how bold I consider a referendum,” he said. “We were elected to lead.”

Instead, Gecker reiterated his previous suggestion that the board at least advertise a higher possible real estate tax rate ahead of its vote on setting the rate for the year ahead.

When the board gives notice of its public hearing on the tax rate, the rate included in the notice is the highest it can consider.

Gecker has argued that advertising a rate higher than the current 95 cents per $100 of assessed value will enable the board to have a more realistic discussion about what level of services residents want from the county and how they want to pay for them.

“To me, the bold step is, let’s go ahead, let’s advertise a higher rate, let’s have that discussion,” Gecker said.

Carmody Carmody Holland countered that “we will receive more money from a meals tax than [an increase in] real estate tax.” County officials have estimated that a meals tax would bring in $3.8 million for each one cent in tax, while each one-cent increase in the real estate tax adds $3.0 million.

In addition, Holland said, “You don’t have to pay it if you don’t eat out.”

Earlier in the meeting, Allan Carmody, director of budget and management, presented figures indicating that the county could borrow the estimated $300 million it would need to fund the revitalization program without jeopardizing its AAA credit rating.

However, making the required payments on that debt “does require an additional revenue source,” Carmody said.

Property taxes vary widely in the Richmond region. Chesterfield’s current rate of 95 cents per $100 of assessed value – which was cut from 97 cents in 2008 – is the 26th-highest in Virginia.

Richmond’s rate of $1.20 is the state’s eighth-highest, while Henrico’s 87 cents and Hanover’s 81 cents rank as the 33rd- and 36th-highest in the state.

On the other side of the ledger, meals taxes are collected by numerous localities across Virginia. In the Richmond metropolitan area, the cities of Richmond, Colonial Heights and Petersburg all impose such taxes, while the counties of Hanover and Henrico don’t.

Richmond collected $21.7 million from meals taxes in 2010, the most recent year for which figures were available, according to the state Auditor of Public Accounts.

Earlier this year, the state Senate passed a bill that would have allowed the Chesterfield and Henrico boards to enact meals taxes without voter approval. That proposal died in the House of Delegates. However, three of the five Chesterfield supervisors told the Observer last month that they still would not support imposing a meals tax without voter approval.

When Chesterfield held a referendum on a meals tax in 1988, 55 percent of voters voted against the idea.

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