
One of the public hearings scheduled for the Monday, April 28 meeting of the Patrick County Board of Supervisors is to gather public input on a proposal to increase personal property taxes by up to 16 cents each year for a three-year period. This would bring the personal property tax rate to $2.20 in three years.
The motion was made by Steve Marshall, of the Blue Ridge District, and seconded by Doug Perry, of the Smith River District. It passed in a 3-2 vote. Marshall, Perry, and Jonathan Wood, chairman, and of the Peters Creek District, voted in favor. Andrew Overby, vice chairman, and of the Dan River District, and Clayton Kendrick, of the Mayo River District, voted against.
With a $197,336 deficit still remaining in the budget, the board plans to use reserve funds to balance it.
“That’s what it’s there for,” Marshall said. “Also, our personal property tax is—we got to increase that. There’s no way around it, it’s been at that price for many, many years. Inflation has not stopped, and if the amount you’re collecting stays at one price and your inflation continues at the rate it’s been going over the last 15 years or so since that’s changed, that’s revenue erosion. You think you’re getting that amount of revenue, but you’re really not cause of the inflation,” he said.
Marshall said he believes the county has either the lowest or second lowest personal property tax rate in the region. He believes the county should instead fall somewhere in the middle, based on a regional median tax rate.
“If we could average what that median is, and that median would be a fair price for taxes, and then phase that in over a three-year period and then after that index that into the” Consumer Price Index for All Urban Consumers (CPI-U), “which is a tool that measures inflation. And you index it to that and it gives you your automatic increases with inflation,” he said.
Kendrick said he wouldn’t agree to increasing the personal property tax without an argument.
“You may not increase the rate in 10 years, but everything you go to buy has went up,” he said, adding the machine and tools tax is placed on businesses.
Marshall said he understands that the machine and tools and personal property taxes are historically tied and set at the same rate, but he wonders if one could be raised without adjusting the other.
County Administrator Beth Simms said she believes most localities keep the two rates the same.
In a document provided to the board, Kendrick noted that an increase of $51,790 is expected from the machine and tools tax without a rate change.
Perry asked whether the increase was due to the U.S. 58 expansion project.
“So that’s an increase we’ll see this coming year, and we’ll see some extra personal property tax probably through 2031. But once the 58 project is done, that will go away, so just keep that in mind,” Simms said.
Marshall said the county’s budget issue is a revenue problem, not a spending problem.
“It’s a revenue problem because our taxes are just dysfunctional at this point. They’re dated and they need to be brought up to speed. I know it’s an unpopular idea, but it’s also practical,” he said.
Perry believes the lack of revenue is affecting the ability of county departments to function effectively.
“If the money’s not there, the money’s not there. I kind of think we should look at an increase on personal property tax. I know that covers citizens that don’t have real estate, and I know that those on a limited income, they’re not driving around on $80,000 vehicles either, so it kind of balances out. We haven’t increased the personal property tax in quite some time,” he said.
Perry added he’d also like to consider increasing the Transient Occupancy Tax (TOT) to help fix the deficit and provide more funding to departments.
“I feel like it’s kind of pushing a can down the road. The next generation boards are going to have to come up with money to bring departments back up to standards that we haven’t budgeted for,” he said.
Marshall said the county’s real estate tax assessment is regressive.
“Which means the lower income folks pay more of the load for the greater income folks. If you get revenue from a different source, it will help offset any real estate tax increases. It’s also a more fair tax because, you know, you have an $80,000 truck you pay your fair share. If your grandma and grandpa are living off of $600 a month on Social Security, naturally they’re going to have a less expensive vehicle and probably pay about $40 a year. It makes things a great deal fairer across the board and it kind of offsets the need for a real estate tax increase,” Marshall said.
Kendrick said the board has already reduced the budget deficit from $2.4 million to $197,336.
“I don’t think anybody’s going to be suffering with that. I think we need a little bit more time, cut a little more, and make it work,” he said.
Simms countered that some of the budget cuts are unrealistic.
“Not really,” Kendrick said.
“Yes, they are,” Simms replied. “We have one department that completely cut office supplies to zero. So, I don’t think that’s realistic to think that department is actually going to be able to go through an entire year with zero office supplies.”
Kendrick suggested Simms look at the building appropriations from this month and how some departments move money between line items.
“Some of them $3,000 come to my head real quick. If they can move it from one fund to another one they’re over budget it to start with,” he said.
Simms said she didn’t disagree with Kendrick but reiterated that expecting a department to go an entire year with no money for office supplies was unrealistic.
“Cutting an additional $197,000 out is going to be disingenuous, I guess is what I’m saying. We’re going to have to come back to you all and say, ‘hey, we’ve ran out of money.’ Or there are some board members that don’t like the moving around of line items, I’ll be honest I don’t either. But I’ve been told numerous times that’s how we do it here and that’s how we’ve always done it here,” she said.
When she’s tried to push for change, Simms said she’s often told, “well, this is just how we’re going to do it.”
“To be quite honest, when our department heads are given an impossible task of cutting costs that can’t be cut, they have to present, ‘well, this is our six-and-a-half percent cut. You tasked us with presenting this cut, here we are, this is what I’ve cut.’ I mean, the cost of some things we just can’t cut. I’m sure all of us have had our personal budgets hit with the rise of insurances and different things, utilities. Unfortunately, we can only cut so far,” Simms said.
One of the other two public hearings is related to a proposed two-percent increase in the Transient Occupancy Tax (TOT), with the additional revenue earmarked for fire departments and rescue squads.
The public hearing to raise the TOT from five percent to seven percent was approved in a 4-1 vote. Marshall cast the dissenting vote.
According to the Virginia Legislative Information System (LIS) website, any county, by duly adopted ordinance, “may levy a transient occupancy tax on hotels, motels, boarding houses, travel campgrounds, and other facilities offering guest rooms rented out for continuous occupancy for fewer than 30 days.”
“The tax shall be imposed on the total price paid by the customer for the use or possession of the room or space occupied in a retail space,” the LIS website states.
The final hearing—to consider approval of the FY 2025–2026 budget—was approved unanimously in a 5-0 vote.
The board indicated that no vote would be held at the April 28 meeting and the hearings were to gather community input. However, the board can vote on the public hearings at a future meeting.