Town will advertise before adopting real estate tax increase

Published 5:52 pm Tuesday, July 9, 2019

By Diana McFarland

Managing editor

The Smithfield Town Council was scheduled to vote on a 3-cent real estate tax increase July 2 but stopped short when it was acknowledged that a mistake had been made.

That mistake will be corrected when the Council holds a public hearing in the fall. 

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The tax rate increase that the Council was poised to vote on, from 16 cents to 19 cents, was based on a June budget public hearing. 

The June public hearing was advertised in a public notice in The Smithfield Times stating that the real estate tax rate would remain at 16 cents and that the Town Council planned to impose a trash collection fee instead.

Between the June 4 budget public hearing and the final fiscal 2020 budget adoption on June 25, the Town Council opted instead to ditch the trash fee and go with the 3-cent real estate tax increase that Town Manager Brian Thrower had initially proposed. {mprestriction ids=”1,2,3,4,5,6″}

The town, however, did not re-advertise that change. 

It wasn’t necessary, said Town Attorney William Riddick in a July 8 phone interview, adding that to do so may have pushed the town past its state-imposed deadline to approve and appropriate funds for the upcoming fiscal year. 

Instead, the Town of Smithfield now plans to advertise and hold a public hearing on its 3-cent tax rate increase at the same time it sets the rate as required in a reassessment year, likely this fall. 

The confusion arose due to the tax increase coming at the same time as the real estate property reassessment, which occurs every four years, as well as the town having a new manager used to doing things a different way, said Riddick. 

Riddick said the mistake was having an ordinance to raise the tax rate included in the July 2 Town Council agenda based on the June budget public hearing. Once the mistake was noted at the July 2 meeting, the Council didn’t vote on the ordinance enacting the tax hike. 

It’s all been done correctly and legally, said Riddick, adding that legally the tax rate does not have to be set until the tax bills go out in December. 

Meanwhile, the Smithfield Town Council has appropriated funds for its fiscal 2020 budget that includes funding based on a 3-cent tax increase, from 16 cents to 19 cents. 

There’s no conspiracy here to keep information from the public as all budget discussions were held in open, public meetings, said Riddick, noting that The Smithfield Times ran stories on those discussions. 

The budget itself is a planning document, said Riddick.

Riddick said that if after the public hearing this fall the Town Council decides not to raise the real estate tax after all, it can do that also. 

“Sure, they can, but they’re not going to,” he said. 

As for transparency sake, Riddick said the tax rate increase “wasn’t a secret” and that it was openly discussed in public meetings. 

“We (the town) are extraordinarily transparent. We go above and beyond,” he said. 

By law, the town must hold a public hearing on the budget and a separate public hearing on the setting the tax rate based on the property reassessment. That’s the hearing that will be held this fall.

The Town of Windsor and Isle of Wight County held their public hearings on setting the tax rate based on the reassessment in June.  {/mprestriction}