The council voted unanimously Wednesday night to hold the tax rate at $1.20 per $100 of assessed value during the fiscal year which begins July 1.
Council members felt they could not ignore the effect of last year’s sale of the former Dominion Semiconductor plant, even though city residents face an average 16 percent increase in assessments. When Toshiba Corp. sold the Dominion plant to Micron Technology Inc., it took a large amount of equipment out of the plant, costing the city millions in machinery and tool tax revenue.
“I was ready (to lower the tax rate),” said Councilman Eugene R. Rainville. “But now, given the situation, we’ve got to put it on hold for now. We’ve just had too much loss in revenue.”
The council’s decision reflected a crucial difference between Manassas and its neighbors. With buildings now taking up 94 percent of the city’s land area, Manassas has not enjoyed the additional revenue from new construction seen in neighboring localities.
At this time, the Prince William Board of County Supervisors has a proposed budget cutting the real estate tax rate 7 cents to $1.16. Manassas Park City Council is planning to cut the rate 4 cents to $1.33.
Manassas council members, however, were uneasy to give up real estate tax revenue, with every cent of the tax rate giving the city and its schools an extra $300,000 in revenue.
“Frankly, I’d like to see that money back in the citizens’ pockets, not the government’s pocket,” said Vice Mayor Harry (Hal) Parrish II. “But this year might not be the year to do it.”
The city’s proposed budget, with a $78.3 million operating fund, also takes $1.3 million out of the city’s general fund, its estimated $13 million in savings, to pay for needed services.
Manassas’ school system will receive $36.1 million from the city, in accordance with the 56.2 percent guaranteed in the city’s revenue sharing agreement. The city is planning to spend 4.1 percent more on workers’ salaries as it makes cost of living adjustments.
The services provided for in next year’s budget are about the same as what the city is paying for this year, says City Manager Lawrence Hughes. “The assessments have gone up greatly this year,” he said. “So that has allowed us to keep our services at about the same level.
One notable exception is $200,000 the city is providing to help in the design of a performing arts center at George Mason University’s Prince William campus. The City Council voted 4-3 Wednesday night to spend the money, Mayor Marvin L. Gillum casting the tie-breaking vote.
“It’ll be an immense asset to the Manassas area,” he said.
Hughes said the money for the center was one of the factors leading him to propose raising the city’s cigarette tax from 15 to 25 cents per pack, creating an extra $150,000 in revenue. The council voted unanimously in favor of the measure.
Staff writer Chris Newmarker can be reached at (703) 368-3101, Ext. 119.