Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, April 18, 1990 TAG: 9004180466
SECTION: VIRGINIA PAGE: B1 EDITION: METRO
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.
Musser and most council members appeared 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.
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 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 real estate assessments, Herbert has said that the city cannot afford to lower the tax rate of $1.25 per $100 assessed valuation if it 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 7 cents.
No council members immediately endorsed Musser's tax-cut proposal.
Councilman James Trout said a 2-cent reduction 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 saving.
"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.
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 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 funding has 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."
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