Fredericksburg’s Tax Man

Balancing a budget is one task that most public officials seldom look forward to. It requires making choices. Often, tough choices.

As reported in the weekend's Free Lance Star, Fredericksburg's recent budget proposal by the City Council indicates the real estate tax rate for the city will increase from 56 cents to 70.5 cents per $100 of value next year. If the proposal is successful, that would mean the tax on property valued at $100,000 would be $705 dollars instead of the previous rate's tax yield of $560. While that appears to be a sharp increase in what property owners will pay in real estate taxes, that's not the entire story.

Real estate tax rates normally fluctuate depending upon the variance or change in the assessed value of real estate in the county/city. What is assessed value? Simply put, it is a dollar value assigned to a property for the specific purpose of assessing or calculating taxes. In Fredericksburg's case, there was an overall decrease of 24 percent of single family residential property values. To compensate for the decrease in real estate property values and, as a result, lost revenue, the tax rate had to be increased to gain needed revenue to meet budget expenditures. In addition to meeting the budget costs, the City Council decided to "plus up" the tax rate to bring in additional revenues as well. That to the tune of $1.6 million.

That additional money may be where the Council runs into a bit of trouble. Many citizens understand the balancing act between assessed value and the real estate tax rate. However, the tax rate increase to generate new revenue seldom passes without opposition. Fortunately, citizens can voice their concerns, pro or con, at a public hearing, scheduled at City Hall, on June 9, at 7:30 PM. For those who enjoy a bit of back and forth with elected officials, you might want to mark your calendar.

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