AlexandriaNews - Alexandria City Council Sets Maximum Real ...

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By Carla Branch
alexandrianews.org

Mayor Euille and City Council at March 12, 2013 meeting (Courtesy photo)

The Alexandria City Council voted unanimously last night to advertise the maximum real estate tax rate for calendar year 2013 and fiscal year 2014 at $1.038 per $100 of assessed value, a potential increase of four cents. Council also voted to advertise the maximum personal property tax rate on vehicles at $5 per $100 of assessed value, an increase of 25 cents. ?Council is also considering a number of other tax increases during the current budget deliberations.

?I am only going to vote for this item because the four-cent increase is a maximum and the discussions here tonight indicate that my colleagues generally agree with me that anything above the Manager?s recommended 2.5-cent increase will be used for capital projects, which are not included in his budget,? said Councilman Paul Smedberg. ?I do not want to spend this extra money to fund operating expenses.?

Councilman Justin Wilson agreed. ?I certainly hope that we can adopt a final tax rate that is closer to the 2.5 cents recommended by the City Manager and agree with Mr. Smedberg that additional funds should go to pay for very important capital projects,? he said.

Council considered raising the real estate tax rate by 5.5 cents, three cents of which could have been used for cash capital. ?After speaking to my colleagues over the past week, I concluded that almost everyone could agree to a maximum increase of four cents and that is what we are proposing tonight,? said Alexandria Mayor Bill Euille. ?Everyone needs to remember that this is a maximum rate, not necessarily what we are going to adopt on May 6. We can certainly adopt a lower tax rate but this establishes the highest rate we can adopt.?

Currently, Council sets aside 2.2 cents of the real estate tax rate for transportation projects. Last night, Council agreed to increase this amount by 0.5 cents, bringing the total amount set aside for transportation projects to 2.7 cents. This will allow Alexandria to take advantage of additional transportation funding, which was included in the legislation passed by the General Assembly and awaiting amendments or Virginia Gov. Bob McDonnell?s signature.

Last night?s ordinance includes: The continuation of the dedication of 0.6 cents of the base real estate tax rate for affordable housing; the dedication of 0.3 percent of the real estate tax revenues for open space (exclusive of any add-on tax for transportation purposes on commercial properties); the continuation of the dedication of 0.5 cents for the Stormwater Management Infrastructure Trust Fund and the same Tier I Potomac Yard Metrorail Station Special Services District Tax Rate of $0.20 for all real property located in that District.

The value of one cent of real estate property taxes is $3.4 million, which means that an additional four cents would add $13.6 million in revenue for the City. The City Manager's proposed increase of 2.5 cents would increase revenue by $8.6 million, leaving $5 million available for additional capital projects if Council adopts the advertised maximum?increase?of four cents.

Council will hold a public hearing on the proposed real property tax rate and personal property tax rate on April 13. Final budget adoption and passage of the ordinance setting the real and personal property tax rates is scheduled for May 6, the same date as final FY2014 budget adoption.

Source: http://www.alexandrianews.org/2013/03/alexandria-city-council-sets-maximum-real-estate-tax-rate-for-cy2013-and-fy2014-at-1-038-an-increase-of-up-to-four-cents/

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