Mindful of the impact of inflation on household finances, as well as rising assessments for both real estate and vehicles, the Chesterfield Board of Supervisors incorporated a sweeping array of tax relief measures totaling $52 million into the fiscal year 2023 operating budget that took effect July 1.
It wasn’t a one-off. As the board prepares to meet tomorrow for the final time this year, county administration is proposing that part of Chesterfield’s $49.2 million budget surplus from fiscal year 2022 be used to further mitigate the local tax burden for citizens and businesses.
Following a public hearing tomorrow, and pending approval by the board, approximately $10 million will be placed into a reserve account for future personal property tax relief. Staff could opt to use the money next year or set it aside indefinitely should assessments on used vehicles fall back within normal ranges in 2023.
“It’s difficult to project what valuations are going to do in the future,” said Matt Harris, deputy county administrator for finance and administration. “If we find ourselves in another situation where external market forces cause an unnatural blip, we’ll have funds available to soften the blow for taxpayers.”
Another $5 million has been proposed to accommodate an increasing number of participants in Chesterfield’s real estate tax relief program for the elderly and disabled, as well as raising its income thresholds to ensure that seniors who qualified in 2022 aren’t rendered ineligible next year by an 8.7% increase in their Social Security benefits.
And as part of a separate item on tomorrow’s meeting agenda, the Board of Supervisors also is expected to authorize the advertisement of Chesterfield’s maximum real estate tax rate for next year at 91 cents per $100 of assessed value – a 1-cent reduction from the current rate that would generate another $5 million in savings for county homeowners.
Once the maximum rate is publicly advertised, the board still can decide to set it lower as part of the fiscal year 2024 budget process, but it cannot exceed the ceiling of 91 cents.
“They remain very mindful of economic factors and inflationary pressures, and continue to emphasize comprehensive tax relief for citizens,” Harris said.
While the fundamentals of Chesterfield’s economy remain relatively strong, national economic indicators are giving off mixed signals. In response, Harris noted staff is “proceeding cautiously” with its recommendations for allocating the local government’s FY22 operating surplus.
The plan calls for $28.1 million in targeted one-time investments, including $8 million for capital projects to cover the rising cost of goods and services due to supply-chain issues.
Meanwhile, staff is recommending that $21.1 million from the surplus be set aside as reserves, $2.8 million of which will help ensure the sustainability of new pay plans for thousands of Chesterfield’s first responders (police officers, firefighters and sheriff’s deputies) and avoid falling back into salary compression if the economy softens.
“We won’t miss a beat when it comes to delivering those pay scale step increases to our hard-working employees,” Harris added. “That’s another promise kept by the board.”