With tax policy on the ballot in Richmond this fall, the City Council is headed for another decision point on how to balance City Hall’s spending needs with the affordability crunch hitting many local households.
The city’s real estate tax rate — $1.20 per $100 of assessed property value — hasn’t been lowered since 2008. But three City Council members think the city can do more than the one-cent reduction favored by Mayor Danny Avula.
The mayor has suggested knocking one cent off the city’s real estate tax rate and slightly lowering the meals tax rate, which Avula has described as “modest reductions.” The mayor has said he’ll pursue the two decreases as long as voters approve a new 1% sales tax in November to raise revenue for the construction and renovation of public school buildings.
Richmond voters will decide on 1% sales tax for schools after Council OKs referendum
If enacted, the extra sales tax would generate up to $47 million per year for school system projects.
Last week, Avula explained his proposal as an attempt to take advantage of a new taxing authority the General Assembly has given the city to improve school conditions, while responsibly granting residents some relief from higher bills.
“We don’t want to just promote a tax increase without being thoughtful about people’s finances,” the mayor told reporters after a groundbreaking ceremony in the Diamond District.
Councilor Reva Trammell (8th District), one of the members pushing for a larger decrease of four cents, called Avula’s proposal “a joke.”
“It makes me wonder what the hell is going on. What is this mayor thinking? All he thinks about is tax, tax, tax,” Trammell said.
In February, the Council passed a non-binding resolution asking the Avula administration to consider building the next city budget on a real estate tax rate of $1.16. The administration initially resisted the idea, but seemed more open to it after the Council agreed to apply it to next year’s budget-writing process instead of the one the city completed this spring.
Now, the Council will consider making that suggestion mandatory, not optional.
An ordinance to lower the real estate tax rate to $1.16, which would have the force of law if approved, was formally filed last week. In addition to Trammell, the proposal is being sponsored by Councilors Stephanie Lynch (5th District) and Sarah Abubaker (4th District).
Depending on how the Council chooses to proceed, the body could end up voting on the real estate tax rate before Richmonders give a verdict on the sales tax plan to fund schools.
Richmond CAO floats possibility of reducing real estate tax rate next year
Supporters of lowering the tax burden have argued ever-growing tax bills are contributing to Richmond’s housing affordability problem.
After the Council’s August break, that proposal is set to go to the Council’s Finance and Economic Development Committee on Sept. 16.
The tax relief ordinance would set a $1.16…
Read More: After Avula proposes ‘modest’ real estate tax relief, 3 Council members
