County eyes 6-cent tax increase

The Albemarle County Board of Supervisors called Tuesday for a budget proposal built on a 6-cent increase in the real-estate tax rate to offset declining revenues.

A divided board asked the county executive’s office to formulate its recommended budget for next fiscal year based on a 77-cent tax rate. The supervisors said they planned to set aside the revenue from 2.5 cents of the rate as a safety net in case of economic woes.

Board Chairman Kenneth C. Boyd maintained that the budget process should start with a 74.5-cent tax rate. At that rate, the average homeowner would pay roughly the same amount of real-estate taxes as under this year’s 71-cent rate once declining property values are factored in.

Other supervisors contended that the 74.5-cent rate wouldn’t compensate for other projected declines in local revenue, and would not cover the additional $4 million Albemarle must fork over to Charlottesville next fiscal year through its revenue-sharing agreement. It also wouldn’t make up for a likely reduction in the county’s state and federal funding.

To create a budget that’s “revenue neutral” compared with this year’s, the tax rate would have to be increased to 76.2 cents, county staffers said. The rate would increase to 79 cents to absorb the additional money the county will owe Charlottesville.

Supervisor Dennis S. Rooker proposed building the budget on a 76.5-cent tax rate, which only Supervisor Lindsay G. Dorrier Jr. backed.

Supervisor David L. Slutzky proposed 79 cents, including a higher contingency fund, but he was joined only by Supervisors Ann H. Mallek and Sally H. Thomas. Boyd, Dorrier and Rooker said that it was too high of a starting point.

Mallek then suggested 77 cents, with only Boyd and Dorrier voting against the proposal.

Boyd said in an interview after the meeting that he probably wouldn’t support a tax rate higher than 74.5 cents unless core services were facing substantial cuts. He said that asking County Executive Robert W. Tucker Jr. to present a budget recommendation built on a 77-cent rate puts less focus on cutting spending.

“What that means is he doesn’t have to look for any more cuts,” Boyd said.

Slutzky has fought to begin with a 90-cent rate, which would allow officials to avoid services cuts. From there, the rate would be lowered as services were scaled back. Slutzky argues that it would be the most transparent way to make cuts.

“I don’t think anybody in this room is proposing a 90-cent tax rate. I’m certainly not,” Slutzky said.

At first, the executive’s office formulated a budget scenario using a 74.5-cent tax rate. Officials said that the 74.5-cent rate would make up for losses in real-estate values but would be insufficient to pay for new initiatives and expenditures, such as employee raises.

The Board of Supervisors is scheduled to set the tax rate and adopt its fiscal 2010 budget April 8.