Subject:
Title
7:45 p.m. -8:00 p.m. Public Hearing for Fiscal Year 2025-26 Proposed Tax Rate
Body
DATE(S) OF PRIOR COUNCIL CONSIDERATION OF THIS ISSUE:
3/15/2025 & 3/17/2025 - Budget Work Session
EXPLANATION AND SUMMARY:
Each year, as the Town’s budget for the following year is developed, a proposed real estate tax rate is recommended by the Town Manager and reviewed by Council during budget work sessions. This public hearing is being held to give Vienna residents an opportunity to provide public comment on the proposed real estate tax rate of $0.195 per $100 of assessed value for fiscal year 2025-26.
The State Code of Virginia, section 58.1-3321, requires that a locality calculate the “Lowered Rate Necessary” based on assessments less new improvements to generate the same tax levy as the previous year. This lowered rate for Vienna in FY 2025-26 is $0.1825 per $100 of assessed value. The “equalization rate” is the rate required to generate a levy with a 1% increase over the previous year’s tax levy on the same assessed base. The equalization rate is $0.1900 per $100 of assessed value. Per state code, Council may adopt a rate no higher than the equalization rate without holding a public hearing. The proposed tax rate of $0.195 is $0.005 higher than the equalization rate; therefore, a public hearing is required.
Town Council has reviewed the budget during conference sessions on March 15 and 17, 2025. The Finance Department is presenting the proposed real estate tax rate and other tax rates at this public hearing for input from the public.
This is the 13th consecutive year with no change or a decrease in Vienna’s real estate tax rate. The proposed FY2025-26 budget is based on this $0.195 per $100 of assessed value rate along with continuation of the current bank net capital rate of $0.80 per $100 of valuation as well as a residential utility tax rate of 20% of the first $15 and a commercial utility tax rate of 15% of the first $300.
The Town Manager’s philosophy is to propose a tax rate that can be sustained (that is not lowered one year and raised the next) and that can maintain a rainy-day fund of at least 18% of the next year’s budget.
Town Council has the option to adopt the proposed tax rates or to lower them from advertised amounts as it sees fit. Tax rate changes require a supermajority (5-2 minimum vote) to pass the motion.
Departmental Recommendation: Recommend a public hearing.
Finance Recommendation: Recommend a public hearing.
Purchasing Recommendation: N/A
Town Attorney Recommendation: Pursuant to the Virginia State Code, the Town Council must conduct a public hearing to receive public comment on the proposed real estate tax rate.
Town Manager's Recommendation: I recommend the Town Council close the public hearing and approve the fiscal year 2025-2026 proposed real estate tax rate, as presented.
Cost and Financing: N/A
Account Number: N/A
Prior Funding Approval: Annual General Budget (Year), Amendments, CIP Budget (Year), or ARPA.
Decision Needed by This date: April 28, 2025
Next Steps: Adoption May 19, 2025; Fiscal year begins July 1, 2025.
PROPOSED/SUGGESTED MOTION
Recommended Action
“I move to close the public hearing.”
And
“I further move to approve the fiscal year 2025-26 proposed real estate tax rate at $0.195 per $100 of assessed value, and the bank net capital rate, residential utility tax rate, and commercial utility tax rate as presented. I further move that the Town Clerk be directed to advertise a Notice of Intent to Adopt at the May 19, 2025 Council meeting.”
Or
Other action deemed necessary by Council.