Town Council to keep flat tax rate for fiscal 2024 budget

In an effort to relieve business owners and residents still recovering from the economic fallout of the COVID-19 pandemic, the Warrenton Town Council voted unanimously on Tuesday to keep the personal property tax rate flat for all classes, including businesses, machinery and tools and vehicles, at $1 per $100 of assessed value.

Real estate taxes will also remain the same at 4 cents per $100 of assessed value.

Per state law, the town is required to adopt the real estate and personal property rates by May 14 each year. The council plans to adopt its proposed fiscal 2024 budget during its June meeting.

The town manager initially proposed increasing the personal property tax rate for businesses and residents to $1.50 per $100 of assessed value, which would have brought in an estimated $985,000 in new revenue for the town to fund employee pay raises and new hires.

Councilmembers initially discussed maintaining a personal property rate of $1 per $100 of assessed value exclusively for businesses. However, in a last-minute decision, they opted to keep the rate unchanged for vehicles as well.

Stephanie Miller, the town’s finance director, said maintaining a flat personal property tax rate would reduce the town’s revenue by $568,054.

Still on the table is whether the council will vote to nix the $25 annual motor vehicle license fee. If left in place, the tax would generate $236,100 in revenue, according to Miller.

In April, the council held a special work session to discuss the proposed tax increase, during which members asked town staff to explore alternative measures to ensure the town remains “revenue neutral.”

Continuing the discussion in their Tuesday morning work session, the town staff put forth a range of proposed budget cuts, one of which involved eliminating funding for the recruitment of a new deputy town manager and economic development manager positions.

Combined the cuts would reduce expenditures by $667,697, according to Miller.

There was some back and forth between councilmembers about whether the town should increase the personal property tax for residents and businesses marginally, citing concerns about the town’s increasing infrastructure costs, such as water and sewer.

At-large Councilmember David McGuire proposed increasing the personal property rate to $1.25 per $100 of assessed value for residents and businesses as a compromise.

“We need to do something,” McGuire said. “I urge caution. We might have a revenue shortfall. We might not. But if we raise the rate very rapidly we can always pull back.”

Ward 5 Councilmember Jay Heroux acknowledged McGuire's concerns and said he was also worried about generating more revenue for the town. But he noted the council should strive to create more balance in its tax base.

“We've been hitting the residents and the businesses pretty consistently for a fairly long time, and the diversification of our revenue sources has to be looked at as well,” he said.

Councilmembers have scheduled another public hearing for June 13, during which they anticipate adopting the proposed fiscal 2024 budget.