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Suffolk residents will have a chance to weigh in Wednesday on the proposed $767.6 million fiscal year 2023 budget that calls for a two-cent reduction in the real estate tax, would reduce the assessment ratio for cars and trucks and add 52 full-time positions. 

The budget public hearing will take place at the 6 p.m. City Council meeting at City Hall in the council chamber. 

The proposed budget would cut the real estate tax from $1.11 per $100 of assessed value to $1.09 — which keeps the city’s rate the third-lowest in the region, with just Virginia Beach and Chesapeake having lower tax rates. 

However, due to the 14% increase in reassessment values, it amounts to an effective real estate tax increase, with overall residential property values increasing by $781.4 million. With 36,885 residential parcels in the city, it represents a $21,184.93 average increase in value for each property. 

A public hearing for the effective real estate tax increase is scheduled for May 4. 

Citing a 2021 Real Estate Information Network market analysis report, median sales prices for homes increased 14.6% in 2021, from $295,000 to $338,100. According to real estate brokerage company Redfin, homes in Suffolk sold for a median price of $368,000 in March.

Cars and trucks under two tons would also be assessed at 75% of their value instead of the current $100%. 

According to Commissioner of the Revenue Susan Draper, that’s because of the unprecedented increase of 42% in the assessed value of light cars and trucks. Draper presented data to council at its April 6 meeting showing the 2022 assessment of cars and trucks to date at $1.1 billion as of Jan. 1, with taxes to date at $45.5 million, versus $776 million in assessments at the same time a year ago and $32.125 million in taxes. 

Draper used four different vehicles as examples of how values have increased. 

A 2017 Toyota Camry’s value went up from $11,330 in 2021 to $16,330 in 2022, but under a 75% assessment ratio, it would instead be valued at $12,250. A 2018 Toyota Rav4’s value increased from $21,650 to $29,700 from 2021 to 2022, but at a 75% valuation, would see it valued at $22,275. For a 2019 Chevrolet Traverse, its value went up from $23,780 to $31,750, but if it is assessed at 75% of its value, it would be valued at $23,180. The 2011 Nissan Rogue valued at $3,300 in 2021 would be $4,730 in 2022, but if it is taken at a 75% assessment ratio, it would be valued at $3,550. 

The proposed budget would also hold the line on some other taxes and fees. It would absorb an increase in tipping fees at the regional landfill, maintain the refuse fee at $25.25 monthly and leave the stormwater fee at $7.50 per equivalent residential unit. 

However, it calls for a 12-cent increase in the water rate, from $10.31 to $10.43 per cubic foot, and a 50-cent increase in the meter service rate, which City Manager Al Moor said would mean an average $1.10 per month increase. The $7.27 per cubic foot sewer rate would remain unchanged. It does not include any charges from the Hampton Roads Sanitation District. 

The budget proposes no changes for the downtown business overlay taxing district (10.5 cents) and the Route 17 taxing district (24 cents). 

Moor’s proposed budget also includes $8.4 million in money for step increases resulting from the compensation study, and it fully funds the school division’s budget, though the school budget depends on what the General Assembly ends up doing with the state budget, and in particular, with the grocery tax. 

The House of Delegates and the Senate both are considering bills that would eliminate the grocery tax. The House would get rid of it at the state and local level, and the Senate would eliminate it only at the state level and keep the 1% local tax.

City Finance Director Tealen Hansen has said the city could stand to lose up to $3 million, which would go to support the school division.  The Senate bill, however, would allow for school divisions to be reimbursed for lost revenue. If that happens, Hansen said the city would cut $3 million the school division sees since it would then get that money from the state. 

Among the 52 full-time positions that would be added to the city’s budget, 18 would go toward Suffolk Fire & Rescue’s second phase of hiring for the new College Drive fire station, 10 would be evenly split between the Parks and Recreation and the Planning and Community Development departments, six would go to the city’s road maintenance and traffic engineering and another two would go for stormwater staffing. 

The school division is asking for $67.3 million from the city, a $2 million increase from its current budget. Its overall $232.5 million budget includes pay increases for staff while adding 28 new positions. 

The budget also would fully fund the $59.3 million of projects in the first year of the city’s capital improvement program and plan.

To view a copy of the proposed budget, go to https://issuu.com/cityofsuffolk/docs/proposed_fy2022-2023_operating_capital_budget?fr=sYTRmYTM1NzI5NDQ. For a copy of the budget presentation, go to https://issuu.com/cityofsuffolk/docs/fy_23_budgetpresntn_4-6-22?fr=sNWQwOTM1NzI5NDQ.