New vote on Smithfield tax rate planned for February

Published 10:30 am Tuesday, December 5, 2023

Smithfield’s Town Council plans to wait until an unspecified date in February to hold a public hearing and revote on its real estate tax rate.

Mayor Steve Bowman and Town Attorney William Riddick told the council at its Nov. 28 committee meetings that they planned to delay the vote to give two new council members who will be appointed this month a chance to get acclimated to their new roles.

The council had adopted a 14-cent rate in June in light of Isle of Wight County’s recent reassessment of property values, but didn’t hold separate public hearings on its budget and tax rate as required under state law when the advertised rate exceeds 101% of the previous year’s real estate revenue due to a reassessment. The town had advertised a 17-cent rate ahead of its June 6 hearing that would have brought in an additional $500,000 or 115% above last year’s revenue due to the countywide 34% average rise in single-family home valuations.

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The council as of September had planned to again advertise the 17-cent rate rather than restrict itself to the 14-cent “revenue neutral” June rate. The term refers to a rate that would result in the town taking in roughly the same revenue under the new assessed values as it did last year under its 19-cent rate using the county’s 2019 valuations. State law prohibits local governments from enacting a tax rate higher than the one advertised, though council members have the option of adopting a lower-than-advertised rate.

A public notice advertising the 17-cent rate was published in the Oct. 25 edition of The Smithfield Times, but the referenced Nov. 7 hearing wasn’t held. Riddick told the Times by email that an unspecified “error in the notice” prompted the Nov. 7 hearing’s cancellation.

Riddick told the council on Nov. 28  the tax rate hearing must be advertised at least 30 days ahead of the scheduled date. Only 13 days had elapsed between the Oct. 25 advertisement date and the then-scheduled Nov. 7 hearing.

The advertisement had further referred to the 10.5% difference between the revenue neutral 14-cent rate and the advertised 17-cent rate as an “effective tax rate decrease.” The state law governing the public notice process, however, refers to this difference as an “effective tax rate increase.”

Riddick further contended at the Nov. 28 council committee meetings that the 4-3 June vote shouldn’t have passed, as state law requires a two-thirds majority, or at least five of the council’s seven members.

The June 26 vote on the 14-cent rate passed 4-3 over opposition from Vice Mayor Valerie Butler, Councilman Mike Smith and ex-Councilman Wayne Hall. Hall resigned Nov. 7 on the same day as Councilwoman Renee Rountree was elected to the Isle of Wight County Board of Supervisors. Rountree will be resigning her town seat prior to Jan. 1 so she can assume her county office.

The council, which has 45 days under state law to appoint members to fill the vacancies, plans to do so on Dec. 19 after a committee consisting of Butler and Councilman Randy Pack makes its recommendations to the full council.

Smithfield is in the process of transitioning to a fiscal year billing cycle, meaning the next real estate tax bills won’t be mailed until the end of April. The April bills will be for July 1 of this year through June 30, 2024, and be based on whatever tax rate the council adopts in February and the 2023 county assessments.

Smith in June had pushed for a 15-cent rate, objecting to Town Manager Michael Stallings’ plan to use $413,000 in unspent one-time COVID-19 relief funds from the town’s share of the American Rescue Plan Act, or ARPA, to reduce the rate to 14 cents without making any spending cuts.

According to Stallings, a 15-cent rate would still necessitate balancing the budget with $153,000 in ARPA funds.