Town’s proposed budget includes 2.5-cent tax increase
Farmville property owners will likely pay higher taxes next year for the first time in almost 40 years.
Town Manager Dr. Scott Davis told the Farmville Town Council during a work session Wednesday, April 7, that the 2021-22 budget he will present at the Wednesday, April 14, Town Council meeting is balanced at a rate 13 cents per $100 valuation.
“The town has not increased taxes, as far as we can go back, since 1984, and I think it is probably longer than that,” Davis said. “Which is not a positive thing. I think you should always have some type of increase along the way, especially when you offer the services the Town of Farmville offers to our community.”
The 13-cent rate is 1-cent higher than the town’s rate last year. The rate is actually 2.5 cents higher than residents paid last year. Prince Edward County’s recent property assessment increased property values by an average of more than 18%. To keep town taxpayers paying the same they paid last year, the rate would have to be dropped to 10.5 cents.
A 13-cent rate would mean home owners with property valued at $250,000 after the reassessment would pay $325 in property taxes. That same property owner would have paid $246 under the old 12-cent rate before reassessment.
The additional 2.5 cents will yield the town an additional $154,898.91 per year.
The town’s main financial problem is that it is paying its debt by transferring $900,000 per year from the water and sewer fund.
“In order to be financially stable in the future, we need to gradually go away from that,” Davis said. “One of the ways we can do that is through increasing the real estate tax rate.”
Davis said the town will reduce the town’s transfers from the water and sewer fund and also allow the town to fill some needed positions such as a director of community development and recreation director. A new finance director position is also in the proposed budget.
Council member Tom Pairet said the borrowing from the water and sewer fund to pay general fund debt has been a concern of his for years.
“Somewhere along the way we are going to have to address replacement of pipes and infrastructure that is going to eventually bite us if we are not careful,” he said. “If we continue …. to borrow money from one part of our assets to go to another and don’t accumulate any kind of reserves, one of these days we are going to have a real serious problem because we are not going to have any money to do the necessary repairs when the time comes.”
The board unanimously agreed to advertise the 13-cent tax rate. The town’s public hearing on the budget will be held Wednesday, May 19, at 7 p.m.