Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, April 17, 1990 TAG: 9004170626
SECTION: NATIONAL/INTERNATIONAL PAGE: A/1 EDITION: EVENING
SOURCE: JOEL TURNER MUNICIPAL WRITER
DATELINE: LENGTH: Medium
"I still think we need to look at a cut because the higher assessments actually mean a 7-cents increase in the tax rate," he said.
But Musser and most council members appear to support Herbert's recommendation for a $1.3 million package of tax and fee increases to provide more money in the next budget year for schools and emergency rescue services.
To pay for those, Herbert recommended that the city increase its cigarette tax from 5 cents to 10 cents a pack, begin prorating personal property taxes and increase fees for several other services such as building inspections and zoning reviews.
Musser, who helped negotiate the consolidation plan for Roanoke and Roanoke County, said he was pleased with the recommendation for more money to help bring the city's school programs into parity with the county.
But he said that shouldn't rule out a real estate tax cut, adding that a 2-cent cut would mean the loss of about $470,000 a year.
Musser, who tried unsuccessfully last year to persuade council to cut the tax rate, said the city should be able to spare that amount out of a $150 million budget.
Despite a 6 percent increase in School Board applauds city proposal. B1 real estate assessments, Herbert has said the city cannot afford to lower the tax rate of $1.25 per $100 assessed valuation if council wants to retain the same level of services.
To offset the higher assessments, the city would need to reduce the rate to $1.18. Because the city plans to keep the rate at $1.25, state law required it to run a legal advertisement to alert property owners to the "effective tax increase" of seven cents.
No council members immediately endorsed Musser's tax-cut proposal.
Councilman James Trout said a 2-cent reduction in the real estate tax rate would provide savings of $12 a year for the owner of a $60,000 home. He said he has found that most property owners would rather have more police officers or school programs than such a small tax savings.
"I think the budget is well within the total wealth of the community. It promotes one of our assets - our schoolchildren - but avoids any drastic tax increase," Trout said.
Councilwoman Elizabeth Bowles said Herbert and his staff did a good job on the $150 million budget for the fiscal year that begins July 1. But she added that she didn't want to comment in detail on the recommendations until she hears the reaction of residents at a public hearing next week on the budget and tax rates.
Councilman David Bowers said he was pleased that Herbert recommended more money for emergency rescue services and security of the city's computer. He was also happy that the city manager recommended $139,713 to eliminate inequities in pay for some city workers because of the dates for their job reviews.
Schools would get more than 60 percent of the money in the $1.3 million supplemental budget, but part of it also would be spent to hire three more social workers, buy uniforms for several hundred municipal workers and upgrade security for the city's computer system.
Councilman Robert Garland said he was worried that doubling the cigarette tax might cause some city residents to buy their cigarettes in Roanoke County, which has no such tax.
If city residents go to the county for cigarettes, Garland said, they might buy groceries and other merchandise at the same time, causing the city to lose sales tax revenue.
But Finance Director Joel Schlanger said he doesn't anticipate a major loss of sales or cigarettes taxes as a result of the increase.
Schlanger told council on Monday that the city is having to assume a larger portion of the cost for schools and other services because the federal and state governments are reducing aid to local governments.
In just two years, state and federal revenues have dropped from 51.2 percent to 47 percent of the city's revenue base, Schlanger said - "a mere 4 percent, some would say - but it is $6 million, an amount equal to 23 cents on the city's real estate tax rate."
According to the legal advertisement announcing the budget and tax-rate public hearing next week, the city may also consider increasing the annual motor vehicle decal fee for cars from $15 to $20.
But Herbert said he hasn't recommended an increase in the decal fee, despite the ad. That possible increase is an alternative source of revenue if council rejects part of his recommended package on taxes and fees, Herbert said.
The public hearing will be held at 7:30 p.m. Monday in the Roanoke Civic Center exhibit hall. Council won't make a decision on the budget or on tax rates until early May.
by CNB