As Martinsville continues to work toward a budget for the 2025-2026 fiscal year, the city staff is suggesting a new real estate tax rate that amounts to a 21-cent cut.
Residents and officials converged on the Virginia Museum of Natural History on Tuesday for an update on taxes and other budget-related topics.
City staff has introduced a proposed $123.1 million budget that includes a reduction in the current tax rate of 99 cents per $100 valuation.
The staff states that the proposed tax rate of 77.92 cents per $100 valuation is the minimum amount to still allow for growth in the city.
Martinsville officials have floated the idea of changing the city’s tax rate following the most recent reassessment. 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%.
“This recent assessment cycle increased the total assessed value across the board,” said Robert Floyd, the city’s budget director, adding that the value increased by $303.6 million.
Councilors will have to choose between keeping the tax at the current rate or lowering it in the hopes of giving financial relief to Martinsville residents. Property taxes, under the proposed lower tax rate, are expected to net the general fund $8.39 million, an increase of $500,000 over the current year.
“Realistically, if we did nothing with the tax rate, we would budget about $2.6 million more in real estate revenue,” Floyd said.
The city council is scheduled to decide on the tax rate during a May 6 meeting.
Other budget highlights include a reduced general fund of $37.1 million. Under the current budget, that same fund totals $38.2 million.
“A decrease isn’t always a negative when it relates to revenue,” Floyd said, saying that one-time revenue sources can skew year-to-year figures.
“Previously, before the current fiscal year that we are in now, the meals tax for the city of Martinsville was in its own individual fund,” Floyd said. “That was a one-time transfer to move the money that was already in there into the general fund, that accounts for that amount being as high as it is. This year represented what the revenue would realistically be without the one-time revenue.”
Community members questioned how the budget translates to some of their questions, such as improving the roads. Staff said they are in the process of assessing roads to determine what needs improvement and where.
“The key for us is building good relationships with VDOT,” said City Manager Aretha Ferrell-Benavides, who added that documenting street-related issues is important. “By documenting … we’re more likely to get funding.”
Under the proposed budget, the city’s streets fund totals $4.4 million, unchanged from the current fiscal year. It is part of the category known as the special revenue funds, which are restricted to projects that are essential to the operation of the city.
Other special revenue funds include stormwater and non-emergency transport, at $400,000 each.
Within the general fund, public safety remains one of the top priorities, accounting for 23 cents of every dollar spent. Public safety includes police, fire and emergency services.
The current budget also projects a staff of 415, which includes 355 full-time and 80 part-time employees. This represents a steady increase in employees since fiscal year 2022-2023, which had an employee count of 386.
