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Rockbridge County’s real estate tax rate may be lowered this year by 13 cents – from 74 to 61 cents per $100 value – which would put it at the lowest rate it’s been in many years. That doesn’t mean county residents will be rejoicing. Many, in fact, are up in arms over what they think is a back-handed way to raise their taxes – reassessments.
Property values have risen by a whopping 21 percent overall, according to recently conducted reassessments, which are now done in the county at six-year intervals. Six years is the longest period of time the state allows localities to go without undertaking this process to determine property values for the purpose of assessing real estate taxes.
So, what the county’s reassessments are telling us is that this is how much real estate values have risen between 2017 and 2023. The actual increases for specific pieces of properties vary widely. The local market – supply and demand – determines how much the values have changed for specific properties. There is only one time in memory – the period following the 2008 crash of the real estate market nationally – when reassessments showed property values declining.
Although a 21 percent hike in property values is higher than most, the overall trend has been that property values continue to climb significantly most years. Those of us who have owned a home for decades are seeing our original investment increase appreciably. Of course, if we were to sell and then purchase a comparable property, we likely wouldn’t see any more money in our pockets. And, we’re paying much more in taxes than we did when we first bought our homes. That’s due to something called inflation.
Which leads us to the challenge currently facing the Rockbridge County Board of Supervisors – setting a tax rate that isn’t viewed as a money grab following reassessments. Believe us when we say that the supervisors are trying their level best not to raise taxes at this politically precarious moment. Supervisors who expressed opinions at Monday’s budget work session said they want to set the tax rate at an “equalized” rate of 61 cents that would generate the same amount as the current rate of 74 cents generated on the previous assessments.
This is a tall order that will be very difficult to accomplish. The county’s costs are rising significantly. Proposed expenditures are up by $3,833,529, or 7.2 percent. Revenues based on an equalized tax rate are to go up by $1,443,540, or 2.71 percent. That leaves a budget gap – some might call it a chasm – of $2,389,989.
The supervisors would have to cut services, give employees lower raises than the 7 percent ones the state is planning for its employees, dip into the county’s fund balance or do some combination of the three. None of these options is desirable. We don’t envy the supervisors.
If the supervisors choose to raise the tax rate above the equalized rate of 61 cents, they won’t be raising taxes because of reassessments. Rather, they would be doing it in spite of reassessments. That’s small comfort to someone whose property value shot up by 40 percent. Such an individual will be paying a higher tax because of reassessments. But, that person will also be realizing a greater return on his or her investment.
In comparison with other jurisdictions in the region, Rockbridge County has a relatively low tax rate. This will continue to be the case when a new rate is set and tax bills are due. Reassessments won’t change this.
