Taxes remain a looming factor in Martinsville as city leaders begin discussing a proposed budget.
City Manager Aretha Ferrell-Benavides presented the city’s 2026 budget at the city council’s Tuesday meeting. While city staff is required by the state to present a preliminary budget on or before April 1, the presented budget isn’t final.
The budget includes an overview, goals established by council and departmental budgets. As the council works to finalize parts of the budget, the city’s tax policy will be among the topics.
Last month’s property reassessment, the first since 2023, increased the assessed value of many properties. The city saw a median property value increase of 54.3%, while the total assessed value of real estate in Martinsville rose by 37.65%. Staff have spent the past few weeks considering reassessment appeals.
Martinsville budget meetings
- April 10: Real estate tax informational meeting, 6 p.m., New College Institute
- April 29: Community meeting, 5 p.m., Virginia Museum of Natural Sciences
- May 1: Community budget meeting, 5 p.m., city council chambers
- May 8: First reading of budget ordinance
- May 20: Second reading of budget ordinance
Prior to the appeals, the assessed value totaled $1.09 million. Staff anticipates that, after the appeals process, the assessed value will drop to $1.03 million.
Councilors have expressed the desire to adjust the city’s 99-cent tax rate in a way that doesn’t have a significant financial impact on residents but still manages to accommodate growth.
Ferrell-Benavides reiterated this, saying that a reduction in the tax rate is a “big goal.”
Based on staff calculations, an unchanged tax rate is projected to increase the city’s property tax levy from $7.2 million to $9.3 million.
Staff suggested other rates, including a reduction to 75 cents per $100 valuation, which would result in no new property tax revenue for the city. Staff is currently proposing a rate of 82 cents, an amount they said splits the difference between lowering the tax rate while allowing for some growth.
Under the current tax rate, a home valued at $100,000 would have a tax bill of $990. Under the proposed 82-cent rate, that same property would have a tax bill of $820.
Councilor Aaron Rawls warned that because property values are higher, a lower tax rate wouldn’t necessarily result in a lower tax bill. Rawls, along with fellow council members and city staff, have warned residents not to conflate the tax rate with the tax reassessment. On April 10 at the New College Institute, staff will host a community informational session to answer residents’ questions about reassessment.
The budget proposal presented by Ferrell-Benavides includes an 8% increase in real estate property tax revenue. It projects real estate tax revenue to total $8.5 million compared to the current fiscal year’s budgeted amount of $7.9 million.
The council set May 8 for the budget ordinance’s first reading and May 20 for its second reading. A number of workshops are also scheduled, including a community workshop on May 1.
The beginning of the 2025-2026 fiscal year is July 1.
“This budget is a culmination of a lot of hard work and a lot of effort,” Ferrell-Benavides said.