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The City of Danville will advertise a real estate tax rate 7 cents higher than the current rate. City Council has the option of choosing a lower rate, but cannot exceed 7 cents once advertised.
In addition, the City will advertise a 50-cent increase in the personal property tax rate, a one percentage-point increase in the meals tax, a one percentage-point increase in the hotel/motel lodging tax and a 60-cent increase in the airplane personal property tax rate. City Council also has the option of choosing lower rates for these revenue sources.
The City is required to advertise maximum tax rate increases weeks ahead of making a final decision on the budget for the next fiscal year, which begins July 1. Public hearings will be held next month. Final adoption must take place no later than June 30.
City Council met Tuesday evening in two work sessions to review a working draft of the city budget. At the close of the second work session, Council directed City staff to advertise the higher rates, but to continue to look for alternatives to minimize rate increases.
City Manager Ken Larking last month submitted a proposed budget that includes additional funding for crime reduction initiatives, public schools and projects designed to grow Danville. In addition, the proposed budget sets aside funds for an average 2 percent pay-for-performance raise for employees and major increases in the cost of employee health insurance, retirement contributions due to new formulas associated with increased life expectancy and medical supplies for inmates at the City Jail.
Since then, City Council has conducted a department-by-department budget review.
The real estate tax rate to be advertised will be 80 cents per $100 in value. A homeowner with a house valued at $75,000 would pay an additional $52.50 per year or $4.38 per month under an 80-cent rate.
An increase in the real estate tax rate would be the first since fiscal year 2003. The current tax rate of 73 cents is second only to Williamsburg for cities and 33 cents lower than the state average.
The meals tax to be advertised is 7 percent. The current tax is 6 percent. The hotel/motel lodging tax to be advertised is 7 percent. The current tax is 6 percent. The personal property tax rate to be advertised is $3.50 per $100 in value. The current rate is $3 per $100 in value.
The airplane personal property tax rate to be advertised is 90 cents per $100 in value. The current rate is 30 cents per $100 in value.
Utility rates will remain unchanged, with the exception of the rate for streetlights, most of which is paid for with funds from the Virginia Department of Transportation.