Martinsville staff reports that the city council’s proposed tax rate of 75.33 cents per $100 is enough to balance the 2025-2026 fiscal year budget.
Councilors discussed the tax rate during their Tuesday evening regular session. The discussion is a continuation of a meeting held the prior week in which staff was directed to come back with details on how the proposed rate would impact the city’s finances.
“I’m proud to report that we are presenting to you a balanced budget that does not rely on use of fund balance,” said Robert Floyd, the city’s budget administrator.
The city’s tax rate has been a point of contention throughout the budgeting process. Officials expressed concern that this year’s tax readjustment would make property taxes prohibitively expensive for struggling residents.
After the initial revaluation and appeal period, staff reported that median property values increased 54.3% while the total assessed value of Martinsville real estate rose 37.6%. To offset this, staff suggested a tax rate of 77 cents, a figure they believed would dampen the financial impact on residents while leaving room for some growth within the city.
Martinsville’s current tax rate is 99 cents per $100 valuation. The county’s preferred 75-cent rate represents a 24% decrease from the current rate.
“Its the lowest rate in more than 20 years,” Floyd said, adding that the decreased tax rate was made possible by the rise in property values.
The reduced tax rate won’t necessarily translate to lower tax bills. Residents might see a reduction, no change or even an increase in their tax bill because of the reassessment.
The budget, under the original proposed rate of 77 cents, was projected to have a revenue of $117.4 million. Under the decreased tax rate, revenue totals $117.1 million. Projected expenditures were reduced from $116.8 million to $116.5 million.
At $37.5 million, the general fund makes up the largest portion of the city’s budget. The school division’s operating budget remains the same at $29.4 million. The electric fund, at $26.1 million, rounds out the top three.
While the school’s operating budget is balanced, the electric fund revenue outstrips expenditures by $337. The general fund’s revenue outpaces related expenditures by $159,743.
General fund revenues under 77-cent and 75-cent rates were $37.7 million and $37.4 million, respectively.
City Manager Aretha Ferrell-Benavides said the revised budget also had some additions, such as mandates from the state. She also said the city eliminated vacant positions while merging others.
