The Manassas Park City Council voted unanimously Thursday night to bring down the city’s real estate tax rate.
The vote brings the rate down to $1.29 per $100 of assessed value, a 4-cent reduction from last year.
The new rate will apply to the second half of fiscal 2005 — from January to June — so it will be reflected on the next tax bills due from Manassas Park homeowners, city officials said.
The rate reduction doesn’t mean lower taxes, however. Because of record growth in real estate assessments, the average tax bill for city homeowners will still increase. Even with the lowered rate, Manassas Park will take in about 10 percent more in tax revenue than it had anticipated when the fiscal 2005 budget was first put together, City Manager Mercury Payton said.
At a public hearing held on the rate change Tuesday, a handful of Manassas Park residents said the tax rate should be trimmed even more, citing significant increases in real estate tax bills because of the growth in land values.
The City Council also made a presentation Tuesday that addressed why the city’s real estate tax rate is so much higher than those of neighboring jurisdictions; the 2005 rates for Manassas and Prince William County are $1.15 and $1.07 respectively, and both jurisdictions are lowering their rates even further for fiscal 2006.
The presentation referenced Manassas Park’s lack of commercial development as one reason for its high rate; less business means residents have to take up more of the city’s financial burden.
Another reason is that Manassas Park’s real estate tax includes a trash fee, which is worth about 5 cents on the tax rate in Prince William County, city officials said.
There had previously been talks about further lowering the rate to $1.27 for the upcoming fiscal year. However, both Payton and Mayor Frank Jones have said that it is currently the city’s intention to use the $1.29 rate for fiscal 2006, at least initially.
“All of our projections to date (for fiscal 2006) are based on the $1.29 rate,” Jones said.
The discovery of errors in the city’s financial records has prompted the city to take a cautious approach to the fiscal 2006 budget, Jones said. As the results of an external audit of the city books come in, a further rate reduction for fiscal 2006 might be possible during fiscal 2006, which starts in July, he said.
“It’s not a matter of if, but a matter of when and how much,” Jones said.