As they allocate funding for vital services – including schools and public safety – during a period of rapidly rising costs for labor and materials, the Chesterfield Board of Supervisors and county administration remain mindful of the adverse impact that inflation is having on household budgets.
County homeowners will receive a 5% real estate tax rebate this June, in addition to a $36.8 million package of tax relief measures that have been incorporated into Chesterfield’s proposed fiscal year 2024 budget.
That comes on the heels of $52 million in tax relief last year – highlighted by a 3-cent reduction in the real estate tax rate, from 95 cents to 92 cents per $100 of assessed value, to partially offset rising residential real estate assessments.
The Board of Supervisors went even further last November, allocating $10 million from the county government’s fiscal year 2022 operating surplus to a reserve fund that was designated for future personal property tax relief.
Since then, used car and truck prices have receded from last year’s supply-driven spike. As a result, personal property assessments are projected to fall by double digits in 2023, which would generate significant tax savings on the thousands of vehicles that are registered in Chesterfield.
With that issue addressed, the county instead will use the $10 million in the reserve fund to provide a 5% rebate on all first-half 2023 real estate tax bills due in early June.
Combined with an already advertised 1-cent reduction in the real estate tax rate, the effective rate for this year will be 89 cents per $100 of assessed value – saving the average Chesterfield homeowner about $125.
That’s the lowest real estate tax rate in the county’s modern history. For perspective, it was at 96 cents as recently as 2018.
“During these times of unprecedented economic pressures, putting money back in the pockets of property owners is important to the board,” said Kevin Carroll, chairman of the Chesterfield Board of Supervisors. “This targeted tax relief will not only help citizens stretch their household budgets, but will also help us as a county remain competitive.”
It’s important to note here that the $10 million in reserves is a one-time revenue source and could not be allocated to ongoing operating expenses, either for the county government or school system.
With residential real estate assessments expected to fall back much closer to historic norms come January 2024, using the $10 million now for a one-time tax rebate is both sensible and fiscally responsible.
It gives immediate relief to homeowners without impeding Chesterfield’s ability to make needed investments in schools, public safety, infrastructure and the workforce.
Those expenditures will be discussed when the county administrator’s proposed fiscal year 2024 budget is presented to the Board of Supervisors during a work session Wednesday at 2 p.m.
“The process of building this budget proposal was in line with what we did in FY23, so it’s really a two-year effort to address the economic pressures on county residents,” said Matt Harris, deputy county administrator for finance and administration. “At the same time, not only are we providing for substantial tax relief, but we’re also able to continue taking care of our workforce so the taxpayers receive both great value and world-class customer service from our talented employees.”
For the second consecutive year, Chesterfield’s proposed budget has been balanced against a comprehensive package of tax relief measures.
The county increased by 8.7% the income brackets for its 2023 real estate tax relief program for the elderly and disabled, ensuring no seniors become ineligible because of the recent cost-of-living increase in their monthly Social Security benefits.
Factoring in the expected decrease in personal property tax bills, most households in the county will receive some form of relief this year.
Chesterfield also is raising the Business, Professional and Occupational License (BPOL) gross receipts threshold from $400,000 to $500,000, which will result in approximately 86% of local businesses being exempt from the tax.