The real estate tax is the single largest revenue source for the County and is expected to generate $182.0 million. The real estate tax is approximately 53.7% of General Fund Operating revenues (excludes the planned use of one-time revenues). Each penny on the tax rate yields approximately $1.8 million in estimated collectible real estate tax revenues.
This tax is levied on the assessments of real property (land, buildings, and improvements) as determined by the Commissioner of the Revenue. The Commissioner of the Revenue conducts a general assessment every two years. The purpose of a reassessment is to distribute the tax burden fairly and equitably. The most recent reassessment was completed on January 1, 2020. The taxable assessed value of real property grew to $18.7 billion, an increase of 11.0%, reflecting the continuing recovery of market conditions.
January 1, 2022 Change in Assessed Values
- Agricultural 13%
- Residential 24%
- Multifamily 23%
- Commercial 11%
- Total Increase 21.0%
The real estate tax rate for the calendar year 2021 is adopted at $0.97, and the FY2022 Adopted Budget assumes the same tax rate. Taxes for real property are paid in two installments, due on December 5th and June 5th of each year.
The FY2023 real property revenue projection is based on the following assumptions:
- 1.3% new construction
- $0.885 real estate tax rate
- Collection rate of 97.5%
- 21.0% increase for the calendar year 2022 assessments
The growth in exonerations has reduced the real property tax that has been collected. Particularly in Stafford County, the increased Veteran Relief is projected to reduce FY2023 Real Estate Tax collections by $14.4 million.
Public Service Corps
The Division of Public Service Taxation (PST) is responsible for the assessment of all property of Public Service Corporations for local taxation. This includes electric, gas, telecommunications, and water companies. The goal of PST is to effectively and equitably assess all property and to accurately distribute the assessed values to each city, county, and town in which the property is located. The change in assessment provided by the PST determines the revenue projection.
The Calendar Year 2022 Personal Property tax rate is proposed at the nominal rate of $5.49 and an effective of $2.75. This change accompanies the elimination of the Motor Vehicle Tax Fee and the increase in assessment ratio from forty to fifty percent. This will provide $4.9M to Transportation Fund to support Road Bond projects in FY2023.
The rate is $0.0001 per $100.00 of assessed value for one vehicle owned or operated by Fire and Rescue and Sheriff’s deputy volunteers and 100% disabled veterans. A special personal property category for vehicles equipped for disabled individuals is set at 0.10 cents per $100.00 of assessed value.
In 2013, the personal property tax on boats was set at $0.0001 per $100.00 of assessed value, effectively eliminating this tax.
In 2009, the Board reduced the personal property tax rate on aircraft to $.0001 per $100.00 of assessed value, effectively eliminating this tax.
Machinery & Tools
Machinery & Tools are equipment used in manufacturing, mining, processing, or reprocessing radio or television broadcasting, cable television, dairy, dry cleaning or laundry business, and trucks used for hire that qualifies as common carriers. In 2013, the Board adopted a tax rate of $0.0001 for machinery and tools and motor carrier transportation, effectively eliminating these taxes.
Merchants’ Capital is defined as inventory of stock on hand; daily rental vehicles as defined in § 58.1-2401; and all other taxable personal property of any kind whatsoever, except money on hand and deposit and except tangible personal property not offered for sale as merchandise, which tangible personal property shall be reported and assessed as such.
In 2016, the Board adopted a special category of Merchants’ Capital for pharmaceutical wholesalers, setting the rate at $0.0001.
In 2019, the Board adopted a special category of Merchants’ Capital for wholesale distribution centers over 100,000 square feet, setting the rate at $0.0001.
Personal Property Tax Rates for Calendar Year 2022
Other Local Taxes
The State collects and distributes the local option 1% Sales and Use Tax in accordance with §58.1-605 and §58.1-606 of the Code of Virginia. Actual distributions are made to the County based on the amount of sales tax collected in the County.
The projection for the FY2023 Sales Tax is 12.7% over FY2021 actual receipts. This maintains a conservative assumption of growth, as previous five-year collections (FY2017 through FY2021) have averaged 8.6% year over year increased revenue.
Sales Tax is projected using historical data to determine the past trend. Department Directors and the Budget and Management Department look at qualitative input for the upcoming year to project changes in consumer behavior. This Sales Tax projection includes the continued practice of the Grocery Tax that is being considered to be eliminated by the State Government. If the Grocery Tax is eliminated, the potential impact to Stafford County's Sales Tax could be up to a $2.4M reduction in revenue.
Consumer Utility Tax
The Utility Consumer’s Tax is a tax levied by the County. It is collected by the utility companies and remitted to Stafford from residential, industrial, and commercial users of electric and gas services. This tax was amended in 2000 by Ordinance O00-78 to comply with changes in State law, which required local consumer utility tax rates to be consumption-based for electricity and gas utility services.
Consumer Utility Tax revenue is projected using past trends, the current receipts of the fiscal year, and any changes to legislation that may impact the tax.
The FY2023 Proposed Budget includes an increase in meals tax from five to six percent, which is projected to provide an additional $2.5M in revenue in FY2023 if enacted on July 1, 2023. Meals Tax revenue is projected on the historical trends, the current year, and projected changes to consumption in the upcoming fiscal year.
The meals tax revenue is collected in accordance with section 58.1-3833, of the Code of Virginia (1950), as amended.
This tax is levied on the probate of every will or grant of administration (deeds, deeds of trust, mortgage, leases, and contracts) by any court within the County. The tax is equal to one-third (1/3) of the amount of the state tax on each such probate of a will or grant of administration. These revenues are collected by the Clerk of the Circuit Court and paid monthly to the Treasurer. General Assembly action in 2004 increased the amount on each probate of a will or grant of administration from $0.15 to $0.25. Recordation revenues have been strong through FY2020. In FY2021 are 53.5% above the same time at mid-year. This is due in part to the low-interest-rate environment. The FY2023 projection assumes Recordation Tax at the same level as FY2021.
Other Local Non-Property Taxes
Motor Vehicle Licenses
The CY2021 Motor Vehicle License fee is $0.
Effective July 1, 2021, in accordance with Section 58.1-3830, any county is authorized to levy taxes on the sale or use of cigarettes, with a maximum rate of two cents per cigarette sold. The FY2023 Proposed Budget includes the addition of Cigarette Tax at the proposed rate of $0.30 per pack. These funds are designated to support ongoing Sheriff’s Department activities.
Cigarette Tax is projected based on FY2022 projected revenue and considers changes in cigarette consumption across the Commonwealth as reported to the Auditor of Public Accounts.
Transient Occupancy Tax
Transient occupancy taxes are collected in accordance with Section 58.1-3819 of the Code of Virginia (1950), as amended. The FY2023 Proposed Budget includes an increase from 5% to 7%. It is a tax on hotels/motels charged for the occupancy of any room or space occupied for a period of less than 30 days. Of the 7% tax, 3% are dedicated to promoting tourism, travel, or business that generates tourism or travel in the locality and recorded in the Tourism Fund. The remaining 4% are transferred to the General Fund. Revenues designated to tourism are shown in the Tourism Fund (under “Other Funds”). The FY2021 collection of Transient Occupancy was impacted due to the Coronavirus Pandemic. Collections through mid-year FY2022 (December 2021) reflect a 63.9% increase over the same period in FY2021.
Bank Stock Taxes
Bank Stock Tax revenues are collected in accordance with Section 58.1-1210 of the Code of Virginia (1950), as amended. These revenues are collected from a tax levied on shareholders by the State at the rate of $1.00 per one hundred dollars ($100.00) value of stock and distributed 80% to Stafford and 20% to the State. These revenues are projected using historical receipts.
Permits, Fees and Licenses
Permits & Licenses
The revenues generated in this category are those collected for permits, fees, licenses, and several other miscellaneous revenues. The majority of revenue in this category is related to development. Building permit revenues are estimated based upon projections of new households, commercial, and industrial establishments. The County has followed a policy of charging user fees to cover the cost of providing services related to special interests. Departments of Public Works and Planning & Zoning continually review and revise fees to capture the costs associated with the processing of development applications.
The economic impact of the Coronavirus Pandemic was projected to reduce the collections of permits and licenses in the fourth quarter of FY2020; however, revenue-maintained pre-pandemic levels. The FY2023 Proposed Budget reflects a projected conservative, lowered collection of permits and licenses fees. The first quarter of FY2022 showed activity lagging. The FY2022 Proposed Budget continues to project modest growth.
Zoning Permits and Fees are projected to increase in FY2023. Activity in FY2021 and through mid-year FY2022 (December 2021) has shown a favorable increase.
The United States Census Bureau estimates that approximately 90% of Virginians have health insurance coverage. In some areas of the Commonwealth, more than 92% of the local population is covered by health insurance that will pay for ambulance transportation if billed for necessary emergency transports. As such, the third-party billing (cost recovery) concept has gained favor in numerous Virginia localities and throughout the U.S. as they recognize this untapped resource. Implementing a comprehensive cost recovery program for ambulance service and transportation has resulted in additional funding to enhance ambulance services and staffing. The County strives to improve response time and address our greatest response deficits.
The FY2007 budget included ambulance cost recovery fees for the first time. Ambulance fees are designated to the Fire and Rescue Department to address the growing needs of our system and our community. The County outsources fee collection.
Fees have been set using the Centers for Medicare and Medicaid customary rates for our region. The “loaded mile” rate is established to cover the cost of the vehicle maintenance and fuel usage, both to and from emergency calls. The fees are evaluated annually to maximize cost recovery and adhere to Medicare’s national fee schedule. The Board approved an increase to the rates in December 2013. The currently approved rates are:
Basic Life Support $ 505.00
Advanced Life Support - 1 $ 656.50
Advanced Life Support - 2 $ 808.00
Loaded Mile $ 12.12
Fines and Forfeitures
These revenue sources are collected by the courts and are designated to deter behavior contrary to the health, safety, and welfare of the citizens of Stafford. Court fines and forfeitures are related to the costs of holding court and processing court records and papers. The Commonwealth of Virginia abolished driver license suspension for non-paid Court fines and fees on July 1, 2019, which diminishes collections, and is reflected in a lowered FY2023 Proposed Budget. Traffic fines include such local violations as driving while intoxicated (DWI) and speeding, as well as non-moving violations such as defective equipment.
Charges for Services
Parks and Recreation Fees
Parks and Recreation charges include gymnastic, aquatic, recreation programs, admission fees, and field and concession fees. The FY2023 Proposed Budget assumes programs were cancelled due to the Coronavirus pandemic are just over 70% of actuals collected in FY2019 (pre-pandemic), which were approximately $1.5M.
Federal COVID Funding
Federal COVID Funding reports Coronavirus Aid, Relief and Economic Security Act (CARES) in FY2020 and FY2021 Actuals. FY2023 Proposed Budget includes a projection of the second round of federal relief called the American Rescue Plan Act (ARPA) of 2021. Stafford County is anticipated to receive $29,695,536 in ARPA funding that must be spent by December 2024. The FY2023 Proposed Budget assumes the use of ARPA funds in the amount of $3.3M to support the Board's Strategic Priorities.
One Time Funds
The FY2023 Proposed Budget plans for using prior year fund balance for one-time expenditures of $12.8M. Of this, $1.8M is for High School #6 from School’s Year End Savings in FY2021, and; $11.0M is from County's prior year funds for Fire and Rescue Stations, capital expenditures, and other one-time funds.
The planned use of Proffer Revenues is also included in the FY2023 Proposed Budget for $1.9M. Proffers are proposed for use as follows:
- Transportation $644,536
- County Projects $1,229,262