The Shadow
WARM SPRINGS — The Bath County Board of Supervisors is considering a tax increase next year.
During a budget work session Tuesday night, County Administrator Ashton Harrison proposed a 5-cent increase on the real estate tax rate in fiscal year 2020-21.
Supervisors countered with a suggested 10-cent increase on real estate and a 15-cent hike on the personal property tax rate. These could be reduced as budget planning continues over the next several months.
“The day of reckoning is upon us,” Supervisor Lee Fry said. “We’re at the point now where the coffers are getting empty.”
Harrison said he balanced his preliminary budget of $17.3 million with $2.3 million from reserves. This year’s budget was balanced with $1.8 million from reserves.
“If you don’t raise taxes, you’ll be broke in two years,” Harrison warned. “It’s caught up with us.”
Bath County’s tax rates are among the lowest in the state. The real estate tax rate was raised to 50 cents per $100 of assessed value in 2017. The personal property tax rate has been 35 cents since 2008.
Harrison said his 5-cent proposal “was a good starting point.” A penny increase on the real estate rate generates approximately $222,503 in additional revenues.
“You have two years to deal with this,”?he continued. “I?don’t think you should wait two years. Then it is just going to be a bigger problem.”
Despite an equalization rate of 100 percent, Harrison explained that the county will lose over $129,000 in public service corporation tax revenues next year due to depreciation.
Harrison’s proposed budget contains no capital improvement requests. It includes four capital improvements commitments — three fire vehicles and a Hot Springs Fire and Rescue SUV — previously approved by the board of supervisors.
Supervisors and the planning commission entertained capital improvement presentations and requests Monday during a joint public hearing.
Harrison’s proposed budget includes an estimated 10 percent increase in health insurance costs and $250,000 to upgrade the electrical system in the courthouse. He also requested $30,000 for a carnival at the county fair in September 2021.
He provided supervisors with information regarding a full-time position in the registrar’s office, and he discussed the possibility of hiring a tourism coordinator as a local, frontline contact who would work with Mikula Harris, the county’s tourism marketing agency.
The Bath County School Board’s proposed budget of $11.3 million is also included in the county’s budget. The budget for schools reflects a $414,445 increase over its current budget of $10.8 million.
The school board will deliver its final budget to the board of supervisors on March 10.
The board directed Harrison to explore the possibility of health care credits for retiring county employees. They also asked him to explore the possibility of an early budget commitment to school board so they could hire staff in a more timely fashion.
Supervisors considered a 10-cent hike on real estate and a 10-cent increase on personal property taxes before a consensus on the 10-cent and 15-cent proposal.
“Ten cents on real estate and 10 cents on personal property would completely cover the shortfall in the budget right now if every single thing was approved,” Supervisor Roy Burns calculated. “At that point, if we suggested that on the budget, saw the numbers and then could make cuts from there if any could be made.
“That’s just basically doing business,” Burns added.
Several members of the board said they would prefer gradual tax hikes over one large increase.
“It took a long, long, long time for this to get broken,” Burns said. “You can’t fix it in one fiscal year, but we can make one good stride this year.”
“I’d rather see it go up gradually, where people can get accustomed to it and it can be affordable,” Fry said.
Harrison added, “You might want to raise them a little bit, but you don’t want to throw that on them all at once.”
Supervisors have scheduled their next budget work session for Thursday, March 19.
