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Haymarket proposes 28 percent tax increase
The Haymarket Town Council proposed a 28-percent real estate tax increase on Monday night during a public hearing at Town Hall.
If approved next month, the tax hike would change the current tax rate from 12.8 cents per $100 of assessed value to 16.4 cents.
On a $200,000 house, the tax bill would work out to $328, up from the current $256.
Officials said the tax increase is needed because home values have plummeted in the last year so the town has less tax revenue coming in.
This tax rate, even coupled with a projected 20-percent dip in business taxes, will allow the town to avoid slashing employee salaries. In addition, the police department will be able to lease two brand new cruisers.
"In fact, we don't have to cut anything," said town treasurer James Naradzay.
The town is in a little better shape than expected because the meals tax is actually a stronger money-maker than initially projected. Naradzay projects it will bring in about $323,000 over the next year.
Of that money, $50,000 will be used to fund the Street Scape project and the rest is being designated for capital improvements.
"They're getting a strong bang for their buck," Naradzay said of Haymarket taxpayers. He honed in on the town's full-time manager, a "stronger" deputy clerk than in previous years and new police cruisers valued in the low-to-mid $20,000 range.
Only one citizen spoke out on the budget at Monday's public hearing. Planning Commissioner Linda Landwehr said she is "sorry the town is in a position still not to have sold this property," as the $2.3 million deal with commercial developer Gerry Kennedy has yet to settle.
Thus, the biggest problem with the budget is that it does not include the sale of the Town Center property.
The council on Monday voted unanimously to once again extend the settlement deadline, which was due to expire next week. The new deadline is the end of the current fiscal year on June 30.
Kennedy is still in the process of lining up a bank to co-sign with him at settlement and essentially help him finance the project. He said on Monday that there are two banks interested in his plan to bring up to 20 small businesses to the Town Center. He also plans to move four historic buildings from around town on to the property as part of a preservation effort.
Last month, three banks were expressing interest.
"Tthe institutions that we're in discussions with are looking very favorably at the project and are in the process of internal reviews so we can get to settlement," said Kennedy.
He added that one of those internal reviews is set to be completed this week.
But because the town has yet to settle with Kennedy despite voting to sell the property months ago, the prepared budget for next year assumes the town will still be paying usual costs for owning and operating Town Hall, located at the Town Center.
"We made a determination after the last budget session: it made more sense to me to keep the profile of us owning this property for the new budget because it's easier to remove line items than add them," said Naradzay.
One future source of revenue Haymarket can count on is the federal stimulus program. Town Manager Gene Swearingen revealed Monday night that the town has qualified for a $150,000 federal grant so it can buy trolley cars to be used for commuters in and around town.
While the town would still have to fund part of the service itself, the local projected cost would decrease from around $90,000 to closer to $30,000, Swearingen said.
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