- March 7th, 2012, 11:39 am
#383988
http://www2.newsadvance.com/news/2012/m ... r-1745294/
TAX HIKE?
Under the city manager’s budget, the real estate tax rate would rise from $1.05 to $1.15 per every $100 of assessed value.
If approved, it would mark the first time the city raised its tax rate since 1989. For the owner of a $150,000 home, a 10-cent rate jump would mean an extra $150 in taxes.
The proposal would generate another $5 million in city revenue to help pay for a $3.7 million increase in local school funding among other things.
The Lynchburg City School Board requested a $4.7 million increase in city funding. Payne said they couldn’t swallow that number, but tried to cover the school division’s rising Virginia Retirement System costs.
VRS rates for teachers are set by the General Assembly and outside the control of local school administrators, Payne said. Under the rates proposed by Gov. Bob McDonnell, Lynchburg schools would see an extra $3.5 million in retirement costs. Final VRS rates have not been approved yet by the General Assembly.
Payne’s budget coupled the tax increase with relaxed eligibility criteria for the city’s tax relief for the elderly and disabled program. The city couldn’t predict how many people would qualify for relief under the new criteria.
EAT FOR EDUCATION
Following in the footsteps of Roanoke and other communities, Payne recommended raising meals tax from 6.5 percent to 7.5 percent to help fund school projects. The meatier tax rate would generate an estimated $1.7 million a year to be dedicated to Heritage High School.
Combined with the nearly $1 million a year the city already sets aside for Heritage and new savings accrued by a revamped approach to debt capacity suggested by council, Payne said a 1-point bump in the tax rate may ensure Heritage is funded before the city’s self-imposed 2018 deadline.
The timeline would depend on the project’s final cost estimates. The school board is in the process of hiring an architect to help it sift through options.
Under a 7.5 percent meals tax rate, Lynchburg would have the second highest meals tax in the state behind only the Town of Orange, which charges 8 percent, according to Weldon Cooper Center records.
The city would tie with Covington for second place.
http://www2.newsadvance.com/news/2012/m ... r-1745294/