Cumberland proposes four-cent tax increase

Published 3:20 pm Thursday, April 14, 2016

County supervisors in Cumberland are proposing a four-cent increase in the real estate tax rate while dropping the tax rate to zero for machinery and tools and heavy construction machinery.

The motion, made Tuesday by District Four Supervisor David Meinhard, included the elimination of the forestry category of the county’s land use taxation program.

Email newsletter signup

The advertised rates, if approved, would increase the county’s real estate tax rate to 78 cents per $100 of assessed value from 74 cents. The machinery and tools and heavy construction machinery tax would drop from $3.75 per $100 of assessed value to zero.

The public service corporation tax rate on real estate would increase with the real estate tax rate by four cents.

According to County Administrator and Attorney Vivian Seay Giles, the four-cent increase would bring about $300,000 more in revenue for the county.

Lloyd Banks

Lloyd Banks

District Two Supervisor Lloyd Banks and District One Supervisor Bill Osl opposed the motion to advertise the rates.

The increased personal property tax rate

on airplanes remains proposed at $1.50 per $100 of assessed value, up from the current 50-cent rate.

Eliminating the tax breaks for forestland that qualifies for the program, which is assessed based on use instead of actual value, would bring in almost $400,000 additionally annually in revenue, according to Giles.

Supervisors didn’t take any action on the proposed $30.6 million budget, which could be impacted with the increased and decreased rates, according to Giles.

“If the people in that business were not going to get a break from the land use,” Meinhard said of those who own forestland and receive the tax breaks, “… we would give them a little bit of a break on taking the tax off of their machinery and all that’s used in the logging business. We’ve had that situation for years that we’ve had that land use tax break for agriculture, but we also have no machinery and tools tax on any agricultural machinery.”

He said raising the real estate tax was not his idea.

“I personally prefer that we cut some expenditures,” Meinhard said. “If we are going to raise taxes to try to get out of this economic crunch that we are in, then we have got to cut expenditures by an equal amount.”

Meinhard said that all departments except the school division and the sheriff’s office have seen budget cuts over the last several years. “We have cut everything but schools and sheriff’s department. They’re the only things we’ve got left that we can cut (by an) equal amount to what we are raising the tax rate,” he said.

“I voted against a public hearing to consider higher tax rates,” Banks said on his constituent website. “I don’t support higher rates nor a change in land use to simply spend more money. No one is talking about reducing tax burdens. There is simply a focus on how they might bring in and spend more tax dollars.”

Banks, the board chairman, said he opened the meeting with a motion to drop the 74 cent real estate tax rate to 73 cents per $100 of assessed value. The motion failed.

“There will always be a good reason to spend more money,” he stated. “If we don’t follow a basic simple principle of living within our means, the needless spending and higher tax rates will never end.”

Seven people spoke against the elimination of the county’s land use taxation program on April 5 during the first hearing on the earlier-proposed tax rates. The elimination of the land use tax program was then presented, not as a recommendation, but as an alternative for increased revenue to supervisors during Giles’ budget presentation.

Only two of the four land use categories have participation in Cumberland: agricultural and forestry, according to Giles.

During last week’s hearing, seven people also spoke against the increased tax rate on airplanes. The Farmville Regional Airport is located in southern Cumberland and houses about 26 airplanes. Several pilots said that the increase would result in them moving their planes and, as a result, the county losing revenue.

During her budget presentation to the public, Giles said that the general fund balance had been declining and the tax revenues were “insufficient at present.”

Supervisors are set to hold the public hearing on the proposed rates on Tuesday, April 26, at 7 p.m.