GATE CITY — If it’s approved, Scott County’s budget for fiscal year 2020 will include a tax increase on real estate, personal property, and machinery and tools.
The Scott County Board of Supervisors presented the draft budget and proposed tax increases during two public hearings at a meeting on Wednesday. While no citizens spoke during the public hearings, four business leaders spoke out against the proposed tax increase for machinery and tools.
Highlights of the draft budget
As they were first presented on Wednesday, the tax increases were as follows:
• Real property (real estate) tax rate increasing from $0.74/$100 of assessed value to $0.80/$100.
• Personal property tax rate increasing from $1.40/$100 of assessed value to $1.65/$100.
• Machinery and tools tax rate increasing from $0.72/$100 of assessed value to $1.40/$100.
The draft budget also includes:
• An allocation of $3,382,082 for the Southwest Virginia Regional Jail Authority’s Duffield facility, up from $1,974,080 last year. This remains one of the county’s largest expenses.
• A $480,000 grant for a new burn building, which will be available to local fire departments for training.
• A general fund balance of just over $26.3 million.
Rick Peak and Alex Lupi of Tempur-Pedic and John Justice of VFP Inc., both located in Duffield, spoke out against the proposed machinery and tools tax increase.
“I’m competing with 16 other plants in North America and every little bit counts, and my cost, if this goes through, just went up $130,000, so now I’m going to be less competitive than I was just a year ago,” Lupi told the supervisors. “So obviously it’s going to be a loss of competitiveness for us … but also loss of competitiveness for you, as a county, to attract new business.”
Eric Lane of the Scott County Economic Development Authority also spoke against the move.
“I think that our county needs to be looking at how to create low- and no-tax situations for our businesses, because these are the people that provide the jobs,” Lane said. “We don’t need to forget about that.”
In response to the negative feedback, supervisors voted to lower the proposed machinery and tools tax increase from $1.40/$100 to $0.90/$100 for the next fiscal year. That equates to an 18-cent increase over last fiscal year rather than the originally proposed 68-cent increase.
Supervisors plan to take $622,392 out of the county’s general fund to make up for that lost income and balance the budget. Over the next four years, supervisors plan to phase in the $1.40/$100 tax increase for machinery and tools by implementing a 25 percent, or 18-cent, increase each year.
“If you’ve kept up and know what we’ve done to try to protect this 72-cent tax rate (for machinery and tools), we’ve done, I think a pretty good job doing that,” Board of Supervisors Chairman Danny Mann told the business leaders. “But we’re at a point now where we can’t keep doing it. … We have done everything we can to protect your interests; we really have.”
The board is scheduled to vote on the final budget later this month.