Lynchburg City Council is set to vote Monday on proposals to raise the real estate tax rate while lowering — and in many cases eliminating — the personal property tax on vehicles.
Council will meet again Tuesday with plans to vote on setting the budget for the new fiscal year that begins July 1, along with voting on proposed water and sewer rate increases.
Also Tuesday, council will hold a work session before its regular meeting to consider proposed changes in its rules for conduct during meetings.
Monday special meeting
In late May, council examined a proposal to maintain the current real estate tax rate of 89 cents per $100 of assessed value. But a recent property reassessment increased real estate values by an average of 20% — meaning that keeping the tax rate the same would increase actual tax bills.
To keep tax bills roughly the same, council would need to lower the rate to 76.7 cents per $100 of value.
However, planned growth in the city’s budget caused council to vote 4-3 on June 10 on a very different proposal: Directing city management to prepare a budget that reflects raising the real estate tax rate to $1.025 per $100 of value while eliminating the vehicle tax for many residents.
Council will vote on the proposed tax changes Monday when it meets at 7 p.m. in the council chamber at city hall, 900 Church St.
According to published reports, council member Chris Faraldi proposed the balance of a higher real estate rate and a vehicle tax cut. The proposed personal property tax changes would be approved only if the real estate change is approved.
The proposal calls for expanding personal property tax relief to eliminate the tax on the first $20,000 of a vehicle’s assessed value.
Also, the current personal property tax rate is $3.80 per $100 of assessed value, but the proposal is to lower the rate on personal vehicles to $1.30 per $100 of value, effective Jan. 1, 2026.
According to published reports, former council member Jeff Helgeson expressed concern about the proposals, stating that real estate grows in value while vehicles lose value. Also, current members Martin Misjuns and Jacqueline Timmer have expressed opposition because the scheme would shift more of the tax burden to homeowners.
Raising the real estate tax rate is projected to add nearly $12.25 million in new income, but lowering the personal property rate is projected to decrease income by $14 million, according to projections in the agenda packet. However, the proposed budget projects the city will receive about $7 million in personal property tax income during the second half of calendar year 2025.
Overall, the income projections, including various tax rate and tax relief program changes, show an expected revenue increase of roughly $2 million in the next fiscal year.
You can find the agenda here.
Tuesday work session
Council’s Tuesday work session will begin at 4 p.m. in the second-floor conference room.
Council will consider changes to its rules of procedure, including:
- During the public comment period, city residents would be allowed to speak before non-residents; council members would not be allowed to leave the dais to interact with the public, unless the majority votes to allow it; speakers would not be allowed to approach the dais to present materials or documents, which can be provided by the city manager or clerk; and a speaker’s time would not be extended except by majority vote.
- Adding provisions so that council, by a majority vote, could rescind, repeal or annul a previous council action and could block consideration of a matter “to avoid a subject or motion that is inappropriate or undesirable.”
You can find the agenda here.
Tuesday council meeting
Council will convene its regular meeting 7 p.m. Tuesday in the council chamber.
The agenda includes voting on approval of the city budget, along with votes on proposed water, sewer and stormwater management rate hikes.
The total proposed general fund budget is roughly $254.9 million. The plan to balance it includes plugging in roughly $9 million from the city’s existing fund balance.
Utility rate proposals include:
- Changing the water rate from $3.29 to $3.45 per hundred cubic feet of water used.
- Changing the sewer rate from $8.30 to $8.65 per hundred cubic feet of water used. For customers who get sewer service without water service, the flat monthly rate would go from $64.47 to $66.92.
- Changing the monthly stormwater charge for a single-family unit from $4.93 to $5.15.
You can find the agenda here.
