Wise County supervisors have voted to keep the county’s real estate tax rate at the current 69 cents per $100 of value, which will boost tax revenue by about $5.4 million because of a property reassessment.
Six of eight board members supported maintaining the existing rate because the county faces a multimillion-dollar gap between current spending and current income. Even with the additional revenue, supervisors must find ways to cut spending to make ends meet from now until the fiscal year’s end on June 30.
The Thursday tax rate vote was followed by an agreement to freeze nonessential spending through the end of the fiscal year.
Getting to this point
The property reassessment that went into effect Jan. 1 raised real estate values to the point that supervisors would have to lower the tax rate to 55 cents for tax bills to stay roughly the same.
The average countywide value increase for residential properties was 35%. This was the first reassessment since 2022.
On Feb. 12, supervisors heard 45 people oppose keeping the same tax rate, saying residents cannot afford higher tax bills. But Karen Mullins, the county attorney and interim county administrator, had told the board that even if it kept the same rate and raised other tax rates, including personal property, the county would still be left about $4.7 million short.
Under the leadership of former County Administrator Mike Hatfield, the $83.3 million fiscal 2025-26 budget was balanced by plugging in $7 million from a seven-year-old fund designated in part to pay down construction debt from recent high school consolidations. The current budget is about $788,000 less than the 2024-25 budget.
In previous years, the county depended heavily on short-lived federal American Rescue Plan Act dollars and on spending down its unbudgeted fund reserves to balance budgets.
During a Feb. 17 meeting, board Chair J.H. Rivers said the board had been told that even with the same real estate tax rate, the county might have to eliminate 20 to 25 jobs and cut services to make ends meet.
Tax rate vote
Supervisors met again Thursday facing an audience filled with firefighters, rescue squad members and law enforcement officers.
County Treasurer Delores Smith reminded the board that the county’s cash crunch is a twofold dilemma: Supervisors must increase revenue and cut costs during the current fiscal year, but must also look at spending cuts that would take effect in the next fiscal year.
Keeping the real estate rate at 69 cents would bring in an extra roughly $5.4 million, but at the same spending rate, the county will be short about $446,000 between now and June 30, Smith said.
Wise County has spent down its fund balance, overspending by about $14 million over the last three years, meaning the county will remain about $6 million short compared to June 30, 2025, she explained. The county will begin fiscal 2026-27 in the hole without making at least $5 million in cost cuts, she said, adding that it will take three to four years to get beyond living payday to payday.
Wise County went for nine years without raising property tax rates and has depleted its backup funds, Smith said. “There is no well. It’s empty.”
A motion was made to keep the 69-cent rate. But supervisor Rusty Peters objected, saying tougher spending cuts are needed. “We can’t take every dollar you make, we just can’t,” he told the audience.
Rivers said he had been insistent on changing the rate to 65 cents, but it would not generate enough new income. The county must be able to pay its bills without going to the bank and borrowing money, he said.
Rivers said the county school system agreed to postpone spending several million dollars before the fiscal year’s end, which helps, but supervisors must still find cost cuts.
Vice Chair John Schoolcraft noted that the county’s biggest sources of revenue are Dominion Energy’s Virginia City power plant near St. Paul and the Mineral Gap data center near Wise. However, Virginia tax rules require the county to tax the data center at a rate lower than fair market value, costing the county millions of dollars, he said.
The same applies to the power plant, Rivers noted.
Supervisor Steve Bates reiterated his belief that the county should have been adding 1 penny to the rate annually.
Wise County’s real estate tax rate is tied for the third-highest in the coalfield region. Neighboring rates are: Buchanan County, 39 cents; Dickenson County, 52 cents; Russell County, 57.9 cents; Tazewell County, 58 cents; Lee County, 69 cents; Scott County, 77 cents; city of Norton, 90 cents.
The board voted 6-1 to keep the current rate, with Peters voting no and Tim Boardwine abstaining. Then the board voted 7-0 to freeze all nonessential spending through June 30, with Boardwine abstaining again.
Boardwine did not respond to Cardinal News’ inquiry as to why he abstained from both votes.
Rivers noted that the board’s next regular meeting takes place this coming Thursday, and it will likely be recessed to another session focused on cutting costs.