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The Cumberland County Board of Supervisors is preparing to vote on the county’s real estate tax and Fiscal Year (FY) 2021 budget Tuesday, April 28. The tax rate is expected to be between 70 and 77 cents per $100 valuation, meaning county taxpayers will likely pay more in property taxes in the coming year.

County Administrator Don Unmussig gave a presentation to the board during its regular monthly meeting held via an online Zoom conference Tuesday, April 14.

In his presentation, Unmussig noted the FY2021 budget expenditure requests submitted by all county departments totaled $16,643,812.

The number is more than $1 million higher than the FY2020 approved budget of $15,548,441.

Unmussig said he and Cumberland County Finance Director Jennifer Crews were able to work with all departments to reduce the initial budget requests down to $15,921,335.

He told The Herald a one-time $500,000 payment to the county  in relation to the new landfill project was applied to the FY2020 budget revenue to cover expenditures, meaning the FY2021 revenue estimate is a minimum of half a million dollars less than last year’s estimated revenues – a severe constraint on the budget planning process.

The county’s total estimated general fund expenditures amounted to $8,131,410. Unmussig also presented the total estimated general fund transfers as being $7,789,925, bringing the sum of both figures up to $15,921,335.

Unmussig said the general fund revenue breakdown contingent upon receipt of all federal, state and local revenue reflected just $2,987,314 of the county’s revenue coming from the commonwealth, with a whopping $12,934,021 coming from local sources, over $10 million of which is coming from property taxes.

Unmussig added that Virginia Governor Ralph Northam has asked the General Assembly to revisit the approved state budget to factor in the costs of the state’s COVID-19 response and make adjustments. State funding levels approved for Cumberland in March, he emphasized, are expected to decrease.

Supervisors will be in a tough position. This year’s real estate reassessments exceed last year’s total assessed value of real property by 10.87% overall.

The tax rate which would levy the same amount of real estate tax as last year would be 70 cents per $100 of assessed value. The current pre-assessment tax rate is 78 cents per $100.

As the required revenue and expenditure balances are $15,921,335, for the county to fully fund the FY2021 budget with only FY2021 collected revenues, the FY2021 real estate tax rate and public service corporations rate would have to be 77 cents per $100 of assessed value, and that’s after $722,477 in budget cuts were made.

If the board was to set the real estate tax rate at 70 cents per $100, overall revenue collected would only total $15,242,573. If that were the case, the county would need to use $678,762 from the reserve fund just to meet its requirements. A 73 cents per $100 rate would still leave the revenue balance nearly $400,000 short.

“As ugly as is for me to tell you, that’s where it is and that’s where we stand right now,” Unmussig stated.

The bottom line of the presentation? The board will have to set a real estate tax rate somewhere between 70 to 77 cents per $100 come April 28. Every penny levied above 70 cents is a tax increase to taxpayers, and every penny levied below 77 cents means more money coming from the reserve fund.

“Cumberland has got to develop other sources of revenue to reduce such a high reliance on real estate taxes and personal property taxes levied on our citizens. We’ve got to find other revenue streams,” Unmussig stressed.

The county already has a real estate property tax rate that is significantly higher than surrounding counties.

A public hearing regarding the real estate tax rate is scheduled for 7 p.m. April 28. The public can listen to the hearing online and submit public comments via email prior to the hearing. After setting a tax rate, the board will then vote on the FY2021 budget.

The full budget presentation from Tuesday night’s meeting is available on the Cumberland County website.