Personal property tax increase of 35 cents proposed in Bath County
04-24-14 Bath recommended budget
By Bonnie Ralston
In Bath County, new County Administrator Ashton Harrison is working through his first budget cycle.
Harrison is proposing a thirty five cent increase on Bath’s personal property tax, which would bring the rate up to seventy cents per $100 of assessed value.
“When you look at our overall budget, even though we do have a reserve balance, with our current expenses exceeding our revenue, it’s time to look at means to raise revenues,” says Harrison.
The recommended budget contains a decrease of about $720,000 in the county budget and an increase of about $700,000 in the school budget. Harrison has not proposed any decreases to the school budget. It is included in its entirety, as the school board submitted it.
Harrison says that even with conservative revenue estimates, in the recommended budget there’s a shortfall of a little over one million dollars. In addition to the proposed personal property tax increase, Harrison says the county is going to have to also tap into reserves, using about $1.2 million, to make up the deficit.
“I know some people look at our reserve balance and have asked me ‘Well it looks like you have all this millions in reserve’,” says Harrison. “If you look at the recommended budget, we’re looking at an ending fund balance of seven million dollars. But that seven million, you have to remember, we need to set aside 20% for cash flow purposes.”
In the recommended budget about three million is in the reserve, not to be used for cash flow.
Budget preparation in Bath can be tricky, since so much of it is based on a number that changes. The property taxes on the pumped storage station contribute a significant amount to the budget. But that amount changes from year to year because Virginia sets the equalization ratio on what percentage of the project’s value the county can tax. This year the ratio is 100%.
“Anytime you have one major taxpayer, and those are accessed by the state, you have to be cognizant of the need to have a reserve balance,” says Harrison. “Because you can have those fluctuations vary year to year, and when they do drop, and they will drop. It’s not a question of if that equalization ratio will drop, it’s only a matter of when it will drop.”
As part of county budget planning, the projects requested on the capital improvement plan are also under consideration.
“These are some struggles we’re going to have to look at,” says Harrison. “When you look at the capital requests, for example, from all the organizations they’re very legitimate requests. Fire engines, water lines, school buses, but we’re just at that point where we have to start making cuts somewhere, in my opinion.”
The recommended budget can be found on the Bath County website at www.bathcountyva.org under public information.
“One of the main goals this board of supervisors wants to work on is the county budget,” says Harrison. “Looking at what kind of reserve balance policy we do need, how do we fund, can we look at committed revenues, for instance, for our future capital projects. And I’m very optimistic, since that’s actually the number one goal of the board of supervisors. So we’re going to have to roll up our sleeves and get to work on coming up with some ideas.”
The public hearing on the recommended budget is Tuesday evening April 29 at 7 in Room 115 of the courthouse in Warm Springs.