The change in the estate tax rate initially proposed by Fredericksburg City Manager, Tim Parodi, will be up for discussion at a special working session of the city council, followed by a public hearing on Tuesday evening.
The working session will begin at 5:30 pm and the public hearing will begin at 7 pm
Parodi’s budget that he proposed last month called for the estate tax rate to be raised by 3 cents from 83 cents for every $100 of assessed value to 86 cents.
However, the discussion rate would be 87 cents.
The change comes after consulting with city employees and financial advisors who believe that 1 extra cent, which amounts to $450,000 in tax revenue, can be used to buy debt on capital improvement projects.
Councilman Jason Graham expressed full support for the 4 cent tax increase, while other council members expressed skepticism at a working session on April 12.
“What concerns me going forward with something like this is that we have a lot on our plates right now,” said council member Matt Kelly. We’ve already said publicly that we’re going to consider raising taxes next year, the year after that. It’s not just property taxes, but other fees – water, sewage, everything is going up. We haven’t given the audience exactly what it will look like and how much impact we’re asking them to have.”
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Mayor Mary Catherine Greenlaw said raising the exchange rate to 87 cents was “financially wise,” but she’s not sure the public is willing to accept that.
Council member John Gerlach noted that 54 percent of Fredericksburg households qualify as ALICE (Limited Income Assets Limited to Employment). He said that an extra $20 a month means a lot to many and that “we have a real problem in the city where people struggle to make ends meet every month.”
The deputy mayor, Chuck Fry Jr., said it might just be a penny, “but it’s the public’s penny.”
“Whenever I take something out of someone’s wallet, it’s going to be negative,” Kelly added. “You take something from them.”
Frye said he’s heard from some residents who are no longer able to live in the city.
Graham said it’s important to distinguish between tenants and landlords when discussing the estate tax rate, but his colleagues are concerned that landlords will pass the increase on to tenants.
Frey said young people who rented their first apartment years ago in Fredericksburg and considered the prospect of buying a home have given up on that dream.
“What you have to do to live here right now is just crazy,” Fry said. “If someone had a 5-year plan, that plan went out the window. They had to find a new zip code.”
Tax increases in Fredericksburg aren’t slowing any time soon. Graham envisioned an increase of 10 cents over the next three years, but Kelly said that could understate the situation, with several capital projects on the horizon. These projects include a new middle school potentially in the $60 million range, sewage treatment plant upgrades and a new fire station.
“I feel like a record-breaker because in the soapbox every budget cycle is about focusing on what really needs to be focused on first and taking care of first before we get on with other things,” Kelly said. “We haven’t had that conversation as a council yet and we haven’t had that conversation with the community – what’s expected of you in the next few years.”
Another change in the proposed budget would be the inclusion of $5,000 in FailSafe – ERA, a local non-profit organization founded in 2009 to help families affected by prison.
The Juanita Shanks Foundation said city officials did not initially consider the organization’s request for funding. Shanks noted that FailSafe served 265 former incarcerated people last year in planning district 16. There were 71 people from Fredericksburg, the second largest in the district after 113 from Spotsylvania County.
Stafford County fully funded Shanks’ application and her organization received partial funding from Spotsylvania. The order was from Fredericksburg for $9,000. City employees came up with a lower amount based on the city’s population than the surrounding counties.
Shanks said she was initially disappointed but shared her concerns with Greenlaw, who has pledged to review the application. Shanks noted that on July 1, a large proportion of the inmates will return home due to legislation passed by the General Assembly in 2020 to release several thousand of them early.
“Failure to provide them with adequate resources and training exacerbates the multiple layers of challenges already faced by these returning citizens, reducing the likelihood of their successful reintegration into our society,” Shanks said.
Shanks plans to speak at City Council on Tuesday. The public hearing and working session will take place at City Hall, 715 Princess Anne St.
Any city resident wishing to participate remotely will be able to submit their comments in writing by US Postal or email Council Clerk Tonya Lacey by 1:30 p.m. Tuesday.
Taft Coogill Jr.: 540/374-5526