17-cent tax rate back on the table for Smithfield
Published 3:37 pm Thursday, September 28, 2023
Smithfield’s Town Council plans to advertise a real estate tax rate 3 cents higher than the one it adopted three months ago when it holds a new public hearing on the matter.
The council had adopted a “revenue neutral” 14-cent rate in June in light of Isle of Wight County’s recent reassessment of property values. The term refers to a rate that would result in the town taking in roughly the same amount of revenue under the new assessment as it did last year under its 19-cent rate using the county’s 2019 valuations.
State law requires the town hold separate public hearings on its budget and tax rate when the advertised rate exceeds 101% of the previous year’s real estate revenue due to countywide reassessment of property values.
Smithfield had advertised a 17-cent rate ahead of its June 6 hearing. It would bring in an additional $500,000, or 115% more than last year’s real estate revenue due to the countywide 34% rise in single-family home valuations.
The council has yet to pick a date for a new hearing to correct the procedural error, which occurred when the council held only one hearing on June 6 rather than the two required.
The council agreed by verbal consensus at its Sept. 25 committee meetings to again advertise a 17-cent rate.
State law allows the council to adopt a rate lower than advertised, as it did in June, but not higher.
Achieving the 14-cent rate while keeping the budget at $10.2 million involved committing $413,000 in one-time COVID-19 relief funds Smithfield had received from the American Rescue Plan Act, or ARPA.
The June 26 vote on the 14-cent rate had passed 4-3 over opposition from Vice Mayor Valerie Butler and Councilmen Mike Smith and Wayne Hall.
Smith, who’d pushed at the time for a 15-cent rate, had objected to using $413,000 in one-time COVID-19 relief funds from the town’s share of the American Rescue Plan Act, or ARPA, to achieve 14 cents without substantially cutting the $10.2 million budget.
According to Town Manager Michael Stallings, a 15-cent rate would still have necessitated $153,000 in ARPA funds. Smith, at the Sept. 25 meeting, reiterated his opposition to using ARPA funds to balance this year’s budget.
Councilman Randy Pack, however, contends that aside from the ARPA money, the current year’s budget is fully funded without having to dip into the town’s reserves, as was done in past years. By using ARPA money, the town was able to achieve a 6.2% raise for town employees while cutting the real estate rate to be revenue neutral, Pack said.