Kenbridge adjusts tax rates

Published 11:20 am Wednesday, March 27, 2019

Members of the Kenbridge Town Council voted to raise its current real estate property and personal property tax rates, though the personal property tax rate was not raised to the extent that was initially proposed.

Members of council voted to approve new tax rates of 44 cents for real estate property and $1.44 for personal property. The approved real estate property tax remains the same as the proposed real estate property rate of 44 cents, but the personal property tax at $1.44 differs from the proposed personal property tax rate of $1.55.

Prior to the vote, the real estate property tax was 41 cents and the personal property tax was $1.41. The vote raised each rate by 3 cents. Tax rates can be adjusted without advertising another public hearing, town officials said, as long as the adjustment does not amount to more than what was initially advertised.

In addition to the adjusted rates, town council also voted to implement a machinery and tools tax that would charge a rate of 15 cents per $100 value.

The ordinance would be consistent with Article 2 (§ 58.1-3507 et seq.) of the Code of Virginia, which can allow for local taxation of active machines and tools used in a municipality. Idle machinery or equipment used in industries such as farm wineries, manufacturing and others would be exempt from the taxation, according to the Code of Virginia. The tax could potentially affect businesses in the town that use machinery and tools.

The votes came after lengthy public hearings in which residents voiced questions and concerns about the proposals.

Kenbridge resident Jim Duffy, who provided members of Kenbridge Town Council and the Dispatch with data comparing the current and proposed tax rates of Kenbridge to that of surrounding areas, asked what services in Kenbridge the proposed increases would fund.

“I’m happy to pay my taxes … as long as I know what I’m getting for my dollar,” Duffy said.

He contended that even without the proposed increase, Kenbridge charged the most real property tax compared with surrounding towns.

Town Mayor Emory Hodges said the new rates would fund services the town offers, which include trash collection and funding for the Kenbridge Police Department, which council members said needed more officers.

Hodges said surrounding towns typically have revenue sources that Kenbridge does not have currently, such as supermarkets and other retail.

“We do a budget every year and we try to figure out how we can cover our expenses,” Hodges said, adding that water and sewer make up the most of the revenue sources for the town.

Duffy said that some of the towns comparatively have similar employment opportunities and challenges the Town of Kenbridge has, yet have lower tax rates.

“It’s just food for thought,” Duffy said.

Hodges said that proposing the machinery and tools tax was a way to offset further potential increases to the real property and personal property tax rates.

Kenbridge resident and Brown’s Store District Supervisor Mike Hankins spoke and said he would prefer an increase to personal property tax in place of real estate property tax, adding that the real estate property tax increase could potentially hurt both property owners and those who rent properties.

“There are a lot of people who are struggling with their real estate now,” Hankins said. “It’s going to hit those people who can afford to pay more taxes just like it will people who can’t afford taxes. With the folks coming in at Blackstone and (Fort) Pickett over there, I think we need to do everything we can do to keep Kenbridge an attractive place to live, and I think lower real estate taxes would help with that.”

Council members considered raising the machinery and tools tax rate to 45 cents and keeping the current personal property and real property tax rates.

Town Attorney Tessie Bacon said the council would need to schedule a public hearing to advertise the change to the machinery and tools tax, and there would not be enough time for the hearing to be adequately advertised before taxes are scheduled to be collected.

Council member Mike Bender made the motion, and said that considering the lack of revenue sources in the town, the proposed machinery and tools tax, real estate property and personal property tax were the most straightforward ways for the town to receive revenue.

“In my opinion, the proposed rates, where we distribute the revenue required evenly across real estate, personal property and machine, is probably a balanced approach to try to get the revenue that we need to pick up the trash, have the police on the street, provide clean water and sewer service,” Bender said.

Vice Mayor Ken Blackburn proposed an increase in personal property tax.

Hodges said raising taxes is never a popular action, but said municipalities need the revenue to keep up with the needs of the residents.

“It’s inevitable, you’ve got to raise them every now and then,” Hodges said.