FARMVILLE – Town Manager Gerald Spates advised The Herald Thursday morning that Town Council's budget committee is recommending a partial refund to residents who paid the motor vehicle license tax by buying Farmville's vehicle decal in the spring.

The budget committee met with Spates Wednesday evening and will urge Town Council to authorize, during its November meeting, a refund of one-third of what those residents paid for Farmville vehicle tags.

The overwhelming majority of town residents living in Prince Edward County have been opening their personal property tax bills this week and discovering their motor vehicle license tax is going up 40 percent, not 25 percent as previously reported.

An increase of $10 per vehicle for most residents.

The 40 percent increase even surprised at least one member of Town Council when he opened his bill from the County this week, expecting a 25 percent increase.

And town residents will be paying the motor vehicle license tax for the second time this year, as one caller to The Herald noted on Wednesday, having already paid it once in the spring, to the Town, a tax payment which ordinarily would have been good through the spring of 2011.

A year from now Farmville residents will pay the tax once but the Town and County taxes overlap this year as Prince Edward's takes over for Farmville's, at the Town's request.

In a letter sent to The Herald's editor, Spates writes “In order to ease the burden on the taxpayer, the budget committee will be making a recommendation to Town Council at the November meeting to refund a portion of the current Town vehicle tags for those residents that purchased them. This will be done at the Town Treasurer's Office. The refund will be calculated at one-third (33 1/3) of what the individual paid in vehicle tags. This percentage was calculated by the months left on the existing tags after the County tags are purchased in December.” (see Spates' letter on page 3A)

Town residents with cars and pick-up trucks, and who paid the tax, have been paying $25 to the Town of Farmville each spring and they are getting a bill now for $35 because the Town dropped its own tax in order for Prince Edward County to begin collecting the motor vehicle tax on the Town's behalf.

Town Council adopted the Motor Vehicle License Tax Agreement with Prince Edward County last week. Town officials said they were doing so because of complaints by citizens about having to go to the Town Treasurer's office and pay $25 for the Town decal, which they stuck on their windshields to prove they paid the tax.

The deal sees residents now paying the County, rather than the Town, and paying the County's rate, which is higher. Farmville will receive 65 percent of the amount collected by the County. That is because the Town is paying a 10 percent administrative/collection fee to the County and that 10 percent comes out of the 75 percent, or the amount the Town would have collected had it still had its own motor vehicle license tax.

The confusion in the percentage of increase comes because the Town's motor vehicle tax rate was 75 percent of the County rate.

During last week's Town Council meeting, Town Manager Gerald Spates told council, “Right now we sell Town decals for $25….”

No other rate or price was mentioned and the agreement before Town Council stated “upon review of the Town and County Motor Vehicle Tax rates it was determined that Town's rates were 75 percent of the County's rate.

That, at least one council member stated without contradiction, looks like a 25 percent tax increase for Town residents living in Prince Edward; town residents are going to get a 25 percent tax raise, the council member said twice and, again, without contradiction.

Twenty-five percent of $25 is $6.25 and thus The Herald reported on Wednesday, based on comments made at last week's meeting and the language of the agreement, that most town residents in Prince Edward will see the tax bill go up that percentage, or from $25 to $31.25.

But County Treasurer Mable Shanaberger called The Herald and said that, no, the tax bill being sent out is charging $35 for those individuals who had been paying $25 to Farmville for their car or pick-up truck.

That $35 is actually a 40 percent increase over $25.

Prince Edward County Administrator Wade Bartlett explained to The Herald that the language in the agreement stating that “the Town's rates were 75 percent of the County's rate” reflects the “collective” difference between the two localities motor vehicle license tax, based on all of that tax's categories of vehicles, which are taxed at different rates.

In his letter, Spates agrees.

But, Bartlett agreed, “the majority” of Town residents in Prince Edward will pay a 40 percent increase. However, he added, “that doesn't mean the other ones (vehicle categories) aren't important.

“Look at it in totality, not just one” category of vehicles, Bartlett said, and collectively the overall Town rate had been 75 percent of the collective and overall County rate.

Bartlett did say, “the vast majority (in Farmville) are cars and pick-ups.”

And their owners will be paying a 40 percent motor vehicle license tax increase.

But the county administrator also noted “there are still a considerable number (of vehicles) in the other categories.”

And they won't be paying a 40 percent increase.

Bartlett called The Herald on Thursday with specific data, saying 66 percent of the vehicles in the Prince Edward portion of Farmville are automobiles-cars or regular size pick-up trucks.

The owners of those are paying the 40 percent increase.

The remaining 34 percent are among categories that include trailers, boats, motorcycles, heavy trucks, travel trailers or mobile home, and extra large pick-up trucks.

Town Manager Spates reacted to the situation on Wednesday, noting how unpopular the vehicle decals were and the fact that if the Town did what some residents wanted and got rid of tax-which actually the Town has done-the County's motor vehicle license tax would automatically have taken effect.

“If we'd done away with decals,” he said, “we'd be in the same position anyway.”

Town Council, Spates added, can revert to the old system next year, or any subsequent year, by reinstating its own motor vehicle license tax.

Bartlett emphasized that Prince Edward County is merely trying to help the Town of Farmville, and at the Town's request. “This was done to help the citizens of the Town,” he said of the County's agreeing to collect the tax for Farmville. “We're only trying to help the Town in achieving that goal (of not having to scrape decals off their windshields).

Prince Edward County is among the many localities which rid themselves of the vehicle decals, while keeping the motor vehicle license tax in place.