Because of rising assessments, county administration has proposed cutting the real estate tax rate by 3 cents
Mindful of the impact of inflation and rising property assessments on household finances, Chesterfield leaders remain intentional in their efforts to mitigate the local tax burden on all 365,000 county residents to the greatest degree possible.
As a result, the proposed fiscal year 2023 operating budget presented Wednesday by County Administrator Dr. Joe Casey has been balanced against the most sweeping array of tax relief measures in Chesterfield’s history, totaling approximately $52 million.
That includes cutting the real estate tax rate, increasing car tax relief for the owners of all vehicles registered in Chesterfield, exempting more than 14,000 vehicles from personal property taxes altogether, expanding tax relief for elderly and disabled residents and small businesses, and slashing the annual vehicle registration fee by 50%.
“Inflation, rising home and car values, pandemic-related supply chain issues, national energy policy, and now geopolitical considerations have driven up the cost of living for our Chesterfield families,” said Chris Winslow, chair of Chesterfield’s Board of Supervisors. “In response, the board is considering a broad and inclusive tax relief package.”
Adjusted for inflation, the FY23 operating budget maintains per-capita local government spending roughly at 1992 levels.
Here is a breakdown of the tax cuts that have been incorporated into the financial plan, which is expected to be voted on by the Board of Supervisors in April.
REAL ESTATE RATE
In December, the board approved capping Chesterfield’s tax rate on real estate at 93 cents per $100 of assessed value – ensuring all property owners will receive at least a 2-cent reduction this year from the current 95-cent rate.
Since then, county administration has proposed cutting the rate by another penny and built a budget that is based on revenue from a 92-cent real estate rate; it would be Chesterfield’s lowest in at least the last 50 years.
Each one-cent change in the real estate rate is equivalent to about $5 million in revenue.
CAR TAX RELIEF
In 1998, the General Assembly approved then-Gov. Jim Gilmore’s proposal to cut the car tax by 70%. Since 2006, however, state reimbursements to Virginia localities to address the revenue impact of that legislation haven’t kept up with growth, causing a gradual erosion of relief for vehicle owners.
Regardless, for tax bills due in June, Chesterfield is raising the car tax relief threshold from 46% to 55% on all vehicles registered in the county -- a change that will benefit the vast majority of residents and result in the forfeiture of about $15 million in local revenue.
RELIEF FOR ELDERLY AND DISABLED
To keep pace with a 6% cost-of-living adjustment for Social Security recipients and ensure that increased benefits don’t jeopardize the eligibility of residents who qualified last year, Chesterfield has raised the income brackets of a real estate tax relief program for the elderly and disabled.
Program participants must be age 65 or older or totally and permanently disabled; have annual household income of less than $55,200; and their assets (excluding the value of their residence) must not exceed $350,000.
As a result of the changes, qualified residents with annual income up to $33,400 receive 100% relief from taxes on their home.
Those with income between $33,401 and $41,400 receive 60% relief, while those with income between $41,401 and $55,200 receive 35% relief.
BUSINESS GROSS RECEIPTS
Chesterfield also has increased the relief threshold on Business, Professional and Occupational License (BPOL) taxes from $300,000 to $400,000, making nearly 70% of county businesses exempt from paying taxes on their annual gross receipts.
PERSONAL PROPERTY
For the first time in almost a quarter-century, Chesterfield has raised the threshold at which vehicles qualify for total exemption from personal property taxes from $1,000 to $1,500.
An additional 14,300 vehicles registered in the county are no longer subject to personal property taxes as a result of that action.
VEHICLE REGISTRATION FEES
Chesterfield also has proposed to cut the annual vehicle registration fee from $40 to $20 this year. That would provide an additional $8 million in tax relief to citizens, equivalent to a 1.5-cent cut in the real estate tax rate.
Chesterfield vehicles assessed at $1,500 and below are now no longer subject to personal property taxes
COMMUNITY BUDGET MEETINGS
Beginning today, all five board members will host community meetings for their respective magisterial districts at the county’s Public Meeting Room, 10001 Iron Bridge Road.
Following a staff presentation, Chesterfield residents can make comments or ask questions about the budget and capital improvement program (CIP).
The schedule for the community meetings is as follows:
- Thursday, March 10 – Dale District
- Monday, March 14 – Clover Hill District
- Wednesday, March 16 – Bermuda District
- Monday, March 21 – Midlothian District
- Tuesday, March 22 – Matoaca District
Each of the meetings will run from 6:30 p.m. to 8 p.m. and allow for both virtual and in-person participation.
Due to COVID-19 health and safety requirements, seating is limited in the Public Meeting Room and Chesterfield residents are encouraged to participate virtually.
The meetings will be streamed via Facebook Live and YouTube, and broadcast on the county’s television station, WCCT (Comcast channel 98, Verizon channel 28). Those attending virtually may submit comments and questions in the Facebook Live comments feed.
Seating in the Public Meeting Room will be first come, first served for residents who want to attend in person. Face coverings are recommended, but not required.