The mayor and Town Council are slated to adopt the fiscal year 2005 budget and corresponding portion of the capital improvements program April 27. Along with those resolutions, the council will have to take action on a resolution levying the taxes for fiscal year 2005.
If a work session Tuesday night was any preview, the council has a lot of work to do between now and then, especially when it comes to the real estate tax.
THE PROPOSED FY '05 BUDGET released late last week calls for real estate taxes to remain at 28 cents per $100 of assessed value. At that rate, town staff expects to generate more than $7 million for FY '05.
In fact, according to the budget documents, the assessment collected since Jan. 1 is $2.6 million, with a 99 percent collection rate and represents a 9.9 percent increase over the same time last year. The total assessed value includes 55 percent residential and 44 percent commercial.
Since fiscal year '02, the actual real estate taxes collected have ranged from as high as $6.8 million in FY '03 to a low of $6.5 million in FY '04.
Overall, residential assessments have increased 13 percent and commercial assessments are up 6.3 percent. The average residential property value is projected to be $243,692 and the average residential real estate tax bill is $682.34 per year based on the current rate.
AT THE WORK SESSION Tuesday night, April 9, at least two Council members said they would like to see the rate lowered.
"I think it's an outstanding budget. There is not a lot of fat in there," said Councilwoman Carol Bruce. "But I'm looking for a 2 cent reduction on our taxes in here."
Councilman Dennis Husch went further saying he would like to see taxes cut even more.
"As Councilwoman Bruce said, there is a need to cut 2 cents. I think it should be closer to 3," Husch said.
The budget documents equate one penny of the real estate taxes rate to approximately $277,628 in tax revenues.
However, not everyone seems ready to reduce taxes. Mayor Richard Thoesen said he believes the town needs to be cautious given the slowness of the economic turn around. He said that while he would like to reduce taxes, it could result in a reduction of services now provided by the town.
"We're in a hot market right now," Thoesen said. "But as we reduce taxes, we lose the ability to make Herndon shine. I will look hard for tax reductions, but we need to keep up the high level of services."
One suggestion he offered was for the town to review the water and sewer user fees for a possible reduction in the future.
The Town Council will hold a public hearing Tuesday, April 13, beginning at 7:30 p.m., in the Herndon Council Chambers, 765 Lynn St. on the proposed budget.