The Henry County Board of Supervisors did not vote to raise real estate taxes at its Tuesday, June 25 meeting. Instead, in a 5-1 vote, the board voted to amend the fiscal year 2025 school budget by increasing state and local funds by $12,949,052, which includes $975,845 from the county General Fund reserves.
The county considered a proposed real estate tax increase, which would have raised the real estate tax rate from 55.5 cents to 62-cents per $100 of assessed value, as one of several options to provide additional funding to the schools after the state approved its budget.
Garrett Dillard, of the Iriswood District, cast the dissenting vote Tuesday because he said $970,845 was the minimum funding amount presented by County Administrator Dale Wagoner at a June 11 work session. Wagoner said at the time that amount would be only enough to pay the school system’s debt service. The division would have had no funds for its Facilities line item.
“My opposal is about not getting the school system enough money or the funds that we’ve discussed in meetings. Like I said, putting our money where our mouth is, and that’s where that motion comes from,” Dillard said.
Before the board cast their vote, Wagoner provided a brief history.
“On April 3, the board of supervisors adopted the fiscal year ‘25 school budget totaling $107,018,865. Subsequently, the state biannual budget was approved and allocated an additional $11,279,096 for our school divisions. As a result, however Henry County will need to provide an additional local match of $3,816,789,” he said.
At the June 11 work session, Wagoner said the board discussed how to meet this budget funding requirement, and several options to address the funding shortfall, including cuts to other county departments, using the reserved funds, raising taxes, or a combination of all three.
“As it relates to taxes, one cent increase on real estate taxes generates $313,000. So, at the highest point…at 62 cents per $100 of evaluation, that would generate an additional $2,034,500 for the fiscal year 25 budget,” he said.
Eventually, the board approved advertising a public hearing to receive input on a possible real estate tax increase.
Jim Adams, chairman, and of the Blackberry District, said in the time between the June 11 meeting and the public hearing, he’s spoken with various community members and listened to their input.
“I am happy to” say “that I don’t think there’s a single board member tonight who would support this tax increase. We will find this funding in another way,” he said.
Adams said he knows this may come to a shock to some as social media was running rampant discussing what the board was going to do.
“I’ve seen figures of $9 million. Well, you heard $300,000 per one cent, which equates to under $2 million,” he said.
Debra Buchanan, of the Horsepasture District, said the board has always been proud of the hard work educators have invested in the county’s children.
“We’re also mindful of the fact that the school board budget is approximately 65 percent, maybe plus, of the overall county budget. With an additional $10 million that the state provided and $3.8 million that Henry County had to come up with to help improve the educational opportunities for our students, and we’re happy with that,” she said.
However, during discussions about a potential tax increase, Buchanan said she was concerned about the potential impact on those who own their own homes.
“Approximately up to half of the homes in Henry County are considered rental property. So, those that rent do not pay into the increased real estate. In addition, the landlords have the option of raising the rent. It can be a vicious cycle,” she said.
Buchanan said the housing market is currently up with some houses selling at a premium. She also noted the county conducts a reassessment every four years.
“So, when you receive your tax bill in the next year or two, it will look a little different. In most cases, the assessed value of your home will probably go up, and so will your tax bill based on the tax rate. I do not see putting a person that owns their home or rental property or business through two rounds of a possible tax increase within a two-year period,” she said.
Buchanan added she didn’t think it was a good idea to take funds away from public safety, law enforcement, or any government agency.
Pam Cobler, of the Reed Creek District, said she’s received input, and a majority stated they would support the board’s action.
“I received one email supporting a tax increase, I’ve got one direct message that said, ‘I don’t have any children or grandchildren in the Henry County Schools,’ and then I received another email addressed to the entire board,” she said.
Over time, Cobler said she’s heard many different reports and figures of how much the county has in reserve, and asked Wagoner what the number was.
Wagoner said the unassigned fund balance is the county’s monies that’s unencumbered and can be used at the board’s discretion. The most recent audit number indicated the unassigned fund balance is $38,230,250.
“In 2017 and the end of 2018, this board was looking to finance a new Adult Detention Center. To get a better bond rating, it’s kind of like the credit rating for yourself,” but for the locality, “this board established a financial policy to strengthen our bond rating. That financial policy said we would set aside a percentage of our operating budget into a reserve account… basically, we set aside 18 percent of our total budget in the reserve funds to meet our financial policy obligations,” Wagoner said
Cobler noted the number Wagoner presented differed from the numbers the board’s been hearing and seeing in public.
Joe Bryant, vice-chairman, and of the Collinsville District, said the board is elected by the public to serve it on all matters.
“As a county supervisor, my job is to work for the county as a whole. The school board works for the school board if that makes sense. That’s what their primary goal is – the school board system. My goal is to provide to the school board, to public safety, administration, and to all the other entities that we have to provide to,” he said.
He too said the school system gets about 65 percent of the county’s total budget. “The rest of that’s left up for the supervisors to split up between public safety, the sheriff’s department, county administration, all the other entities that goes along with running” the county, Bryant said.
“So, we have to be real tight on money that we work with because we have to divide this money up,” Bryant said, and added that he also likes for the county to have a rainy-day fund, which in his mind in the unencumbered fund balance.
“We use these when we have to use these as emergency because there’ll be times” when we have to use it. “If we start dipping into our unencumbered fund balance and get to a point where we start taking out of it, our bond rating, it’s a double A bond rating, which is one of the highest in the state of Virginia, at some point in time our fund balance is going to change,” he said.
Bryant said if it changes a percent, it could result in taxes being increased.
Travis Pruitt, of the Ridgeway District, said he believes it’s the board’s responsibility as community members to be financially savvy, save and ensure the wellbeing of the county continues.
“That’s why we have these financial policies and that’s why they were approved. So, we have to keep within those regulations so everyone can live comfortably and not have a tax increase or any of that,” he said.
Dillard said the county is not in a bad situation and he doesn’t want people to feel doom or gloom.
“If we pull the money out, according to what Mr. Wagoner said, there’s still $9.4 million that’s totally available for us to use, there’s $24 million that is in the account to make sure we keep the credit rating,” he said.
Dillard said he also assumes that over time the county will generate more revenue so “those funds are going to increase.”
Adams said he was glad the board had options rather than a tax increase.
The board also heard from the public before voting.
Schools Superintendent Dr. Amy Blake-Lewis wanted to highlight information concerning school funding.
Regarding the one percent sales tax, Blake-Lewis said the account has stipulations for the funds to only be used for new construction or major renovations.
“These funds cannot be used for general, preventive maintenance. Currently, Henry County Schools has committed funds from the one percent sales tax for the construction of athletic field houses at both Bassett and Magna Vista High Schools. One percent sales tax funds have also been committed for construction of elevators at Drewry Mason Elementary, Campbell Court Elementary and George Washington Carver Elementary to ensure compliance with guidelines from the Americans with Disability Act (ADA),” she said.
In the superintendent’s estimate of needs that was presented to the supervisors at a joint meeting in March, Blake-Lewis said she presented the findings from the most recent facilities study, which was performed by an outside agency.
“They identified preventative maintenance needs along with priority repairs that totaled nearly $40 million. These needs ranged from electrical switch gear replacements, heating and air conditioning replacements to plumbing projects and parking lot” repaving, she said.
Blake-Lewis said the school division’s original budget request was $23,987,617, with the supervisors’ approved budget of $21,635,583.
“With the revised approved budget from the state, the requests from Henry County Public Schools for the local board of supervisors have not changed. We are asking for the same amount we initially requested because our estimate of need remains constant. It has not changed,” she said.
Blake-Lewis said it’s in the best interest of any community to have a thriving, vibrant school division that serves to meet the physical, intellectual, emotional, and social needs of children.
“When business and industry are seeking new areas for relocation or expansion, the quality of the school division is always a key factor and point of discussion,” she said.
Mary Martin said she heard earlier that day that the board was not going to approve a tax increase but decided to come just in case.
“I’m very happy we’re not going to tax the citizens because a tax increase this year on top of a reassessment next year would have been egregious for every taxpayer. I’m glad that you found another way to do it and with your $40 million fund that you have, I refer to that as the taxpayer’s fund, that’s their fund,” she said.
Walt Shaw and Kellie Mann also signed up to speak, but chose not to because Wagoner answered their questions when he discussed the history of the situation.
In other matters, the board:
*Scheduled a public hearing for the Tuesday, July 23 meeting at 6 p.m. to consider an ordinance change that would move the county’s assessment to a five-year period. Commissioner of Revenue Tiffany Hairston requested this as her office will not be able to make the 2025 reassessment deadline of January 1, 2026.
“I am asking today for an extension until January 1, 2026, to complete this reassessment, and also to open it up to bids from contractors or appraisal service, just parts of the reassessment, not the whole thing,” she said.
According to the Code of Virginia, Hairston said localities are allowed to extend the reassessment by five or six years depending on population.
“As of Sunday night, the economic development has our population as 49,926, so we just made the cut” of 50,000 “to be able to extend it. We do need to kind of move quickly on this because August 1 is when this needs to start in order for us to make our deadline of 2026,” she said.
If there are additional delays, Hairston said she would ask for an additional extension until 2027, “which is something that we really do not want to have happen.”
Hairston said the county’s Public Service is going to take a big hit this year from the sales ratio study.
“It is at 72 percent, and it’s going to drop down to 61.11 percent, so that’s where our revenue comes from – our Public Service. We don’t want any further delays than we need to have,” she said.
Hairston said the Federal Communications Commission (FCC), the state, or the Virginia Department of Taxation, perform the assessed values based off of sale ratio studies.
“They send us what those values are and then we tax it according to our rate. So, it’s going to drop, like 11 percent in assessed value in 2025. I don’t know that that means to revenue as we just deal with assessed value in our office,” she said.
Hairston said the Commissioner’s Office is looking at a 45 percent average increase in assessed value once the reassessment is complete.
*Approved a resolution honoring the Patrick & Henry Community College (P&HCC) National Champion Softball Team.
*Approved its items of consent.
*Heard the monthly report on delinquent tax collection efforts.
*Heard an update from the Martinsville-Henry County Economic Development Corp.
*Approved the local performance agreement and the Commonwealth Opportunity Fund performance agreement for the Press Glass expansion project.
*Heard general highway matters from Virginia Department of Transportation (VDOT) Resident Engineer Lisa Price-Hughes.
*Heard from James Cox about the reassessment and his opposition to having an outside firm do it.
*Awarded a contract to J.L. Culpepper & Company, Inc., to provide food at the Adult Detention Center (ADC).
*Approved an additional appropriation of grant and county funds totaling $180,000, and awarded a sole-source contract of $110,000 to the National Fitness Campaign to purchase a Fitness Court® for the Smith River Sports Complex.
*Approved an additional appropriation of $40,000 received from vehicle insurance settlements to repair existing vehicles for the sheriff’s office.
*Approved a transfer appropriation totaling $627,000 to cover projected overages for various cost centers. The sheriff’s office will use funds from vacancy savings to cover overages at the ADC and unspent funds in employee benefits, legal services, and fuel will be used to cover the other overages.
*Approved an additional appropriation of $90,000 received from the U.S. Department of Transportation’s Thriving Communities Program to fund an active transportation plan and to promote the county’s trails.
*Approved an additional appropriation of $28,000 from the Board’s contingency funds to the unsafe structures and property maintenance line items. These funds will be used to address ongoing costs associated with mitigating unsafe structures and addressing violations of the property maintenance ordinance.
*Approved an additional appropriation of $4,770 from state asset forfeiture funds to cover overtime expenses and office equipment for the Commonwealth’s Attorney’s Office.
*Approved an additional appropriation of $54,280 received from the Return to Locality Funds. Each volunteer rescue squad will receive $10,856, and the Department of Public Safety will receive $10,855.
*Approved a request to rezone approximately 1.6-acres of the Reed Creek District to Agricultural District. The applicant wishes to build additional accessory buildings on the property.
*Approved the county’s participation in a proposed settlement of opioid-related claims against Kroger and its related corporate entities.
*Approved an additional day off for non-essential county employees on July 5.
