Tax relief for the elderly? Reduced services? Addressing Staunton’s biggest issues around property tax increase
STAUNTON — Staunton’s budget season is officially underway with city council introducing a budget ordinance for fiscal year 2024. The first step in that process? A public hearing on an effective real property tax increase which was held during Thursday’s meeting.
Plenty of residents showed up and voiced their concerns with the proposed increase, which would set the property tax rate at 89 cents per $100 of assessed value for a property.
While that is a decrease from the current rate of 92 cents per $100 of assessed value, recent real estate assessment increases of 25.2% across the city not including new construction means that residents will likely have higher property tax bills than previous years. That’s a projected increase of $4.3 million in revenue from real estate taxes.
In order to keep revenues even with last year, the equalization property tax rate is 74 cents per $100 of assessed value.
Residents were concerned about the higher assessment values and voiced issues with what they saw as reductions in city services or excessive spending from the city. With the property tax rate part of putting together the budget at large, The News Leader asked the city about some of the biggest issues we heard about from residents during Thursday’s public hearing.
That public hearing is not the only chance for residents to voice their concerns about the tax increase, as council members Mark Robertson and Alice Woods will be holding a town hall at the Staunton-Augusta Rescue Squad building in the meeting room. That meeting is set for Wednesday, March 29 and will begin at 6 p.m.
Does the city operate at a $10 million deficit in their budget?
Simply, no.
“We don’t operate at a deficit,” city manager Leslie Beauregard said, pointing out to the $6 million carryover the city reported from last year. It’s a requirement for localities to turned a fully-balanced budget, so no matter what changes happen between now and council’s April 27 target date to vote on the budget, the budget will come in balanced.
Is Staunton spending too much money?
“Just like your personal budget go up for your house, costs go up for us, too,” Beauregard said. Beauregard wants to try to provide an analysis on the city’s spending to address concerns from residents, but she pointed at rising prices and inflation as issues that the city has had to contend with over the years. That also goes into keeping wages and benefits competitive for employees to keep the city’s services working smoothly.
As an example, Beauregard pointed to the high school debt. When the city began paying off those debts, that increased costs for the city. The current general fund debt service for schools is over $45.6 million, and represents 80% of total debt for the city.
It’s to be expected, and it’s the same challenges that other localities are facing. The city tries to save money, such as refinancing debt at lower interest rates, according to Beauregard.
“We try really hard not to put that extra burden on,” she said, adding, “When we have to increase our costs, sometimes we have to increase our revenues to support those costs.”
Is Staunton reducing services while increasing taxes?
“I can’t think of anything in my time that we’ve reduced or eliminated,” Beauregard said. She said that recycling collection may be something that residents look at for reducing services, but those services weren’t eliminated. Rather, the service was shifted from curbside pick-up to a centralized location.
Beauregard said that the city is planning on making a permanent location for centralized recycling, which will hopefully offer a more efficient facility and service. That project is also an ongoing process. Besides recycling, she couldn’t name another service that has been eliminated.
“This budget keeps services at the level they’re at, so it doesn’t reduce any services,” Beauregard said.
Beauregard did hope that residents could provide the city with more specific services that they feel are lacking so the city can respond to those issues.
“Maybe there’s an impression that we’re not doing enough paving or maybe there’s an impression that we’re not doing enough sidewalks. I just don’t know, and we do our best to keep up with all those issues with the staffing that we have,” she said.
How realistic is getting to the 74 cent equalization rate?
That’s a difficult question to answer, but Beauregard helped illustrate where the 15 cent difference is going. It’s made up of expenditures from across the budget, ranging from maintaining city services and retaining employees to addressing city council’s overwhelming interest in focusing on economic development in Staunton.
The employee compensation part involves partially implementing a compensation study that was conducted in 2022, including a 5% cost of living increase for all city employees as well as new minimum salary ranges and compression adjustments.
“We’re not only recruiting, we have to retain our employees to provide those city services. If we don’t have a competitive compensation package, then we’re just not going to compete and people will leave,” Beauregard said.
The current budget doesn’t propose any other fee or tax changes other than the real estate property tax. While stormwater and water fees will likely be a topic for next year’s budget with significant capital projects attached, they aren’t being changed for this year’s budget.
“We know council will need to focus more on the capital projects,” Beauregard mentioned, which includes potentially borrowing money to accomplish those tasks. One project that comes to mind that could require borrowing on the city’s part is finding a new location for the city’s juvenile and domestic relations court. With a significant amount of debt already being serviced, the city will need to pay attention to the debt service fund and keep it as solvent as they can.
The increase also helps account for almost a million dollars in additional funding for Staunton schools over last year’s budget cycle.
“That’s one way we can honor that formula and fully fund the schools,” Beauregard said.
During city council’s retreat, one repeated point of emphasis throughout the two days of meetings was focusing on economic development. Beauregard took that vision into account with the budget by introducing a community development director position to Staunton. That role is currently combined with the economic development director role filled by Billy Vaughn, and by separating the two, Beauregard believes that the move helps realize the council’s vision of focusing on economic development while telling companies that “Staunton is open for business.”
“There is a lot that they envision for the city,” Beauregard said, adding, “This budget tried to respond to some of that, or at least start to.”
Now, all of that is to say that there are a lot of moving pieces fueling Staunton’s current proposal of 89 cents per $100 of assessed value for property tax, but this is still the beginning of the budget cycle. Over the course of the next month, council and staff will work on the budget to make adjustments as the council sees fit. That means that 89 cent mark could come down, but necessary adjustments in the city’s plans will have to accompany that as well.
“My proposed budget was my best effort to provide a budget, and now we will help council develop their own budget. Staff will help council, and ultimately, it’s going to be the direction they give us at this point,” Beauregard said. “This is my best recommendation, and so they know what that is now. And now it’s in their hands, and we’ll help them realize whatever it is that they decide at the end of the day.”
Does Staunton offer real estate tax relief for the elderly or disabled?
Yes, and commissioner of revenue Maggie Ragon spoke during matters from the public to inform citizens of their options.
The city’s program covers residents who are 65 and older, as well as those who are permanently and totally disabled. There are restrictions on the relief program:
Annual household income must not exceed $35,000
Assets excluding the home an applicant resides in must not exceed $70,000
The title to the property must be held or partially held by the person claiming the exemption.
The property for which an applicant is looking for an exemption must be the only dwelling of that applicant
Income is based around cash that is coming in on a monthly basis, like Social Security, pensions, or annuity payments. Assets would include items like the value of a motor vehicle, bank accounts, and other held assets.
“Permanent and total disability” is a terminology used by the Social Security Administration. So if a resident is receiving a Social Security disability check, the assumption is that the individual has a permanent and total disability. Applicants under 65 years of age are asked to include documentation from the Veteran’s Administration, Railroad Retirement Board, or Social Security Administration.
If a disabled individual doesn’t have these certifications, there is still another path for them to see if they qualify. They need to obtain a sworn affidavit from two doctors licensed in Virginia that state that the applicant is totally and permanently disabled. One of those affidavits must be based on a physical exam by one of the two doctors.
You can find more details about the program and applications for the tax relief program on the city’s website. Applications are due by May 1.
The News Leader asked Ragon of some issues that consistently pop up during the application process. She said that the most important thing for applicants to remember is to have supporting documentation to attach to their application.
“A rule of thumb is basically any number that you enter on the application needs to have some sort of data to back it up,” Ragon said. That includes things like Social Security annual statements or bank statements. The information is held confidentially by Ragon’s office, and is not shared with any outside parties.
Another issue that Ragon pointed out that regularly disqualifies applicants is failing to account for total household income in their application.
“If there are other folks in addition to that retiree or that disabled person living in their home, we have to consider the income information from those people as well,” Ragon said. There are provisions in the state code that account for disabled individuals that require a caretaker, and that wouldn’t enter into the financial equation.
Ragon’s best advice for residents who “even have an inkling” that they qualify is to please apply.
“Once you have made an application, that is a legal document, it’s an affidavit that we keep on file,” Ragon said. They maintain those files for a number of years, and help Ragon keep track of who to contact about entering into the program. Last year’s limits were lower than this year’s, and Ragon mentioned that there were people who applied last year who she could offer entrance into the program this year because she already had their information.
The office mails out applications every year. While applications are due May 1, applicants who apply late will be automatically be added to the office’s mailing list so they’ll receive an application next year.
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—Akhil Ganesh is the Government Reporter at The News Leader. You can contact him at aganesh@newsleader.com and follow him on Twitter @akhildoesthings.
This article originally appeared on Staunton News Leader: Addressing Staunton residents concerns surround budget, property tax increase
