Caroline budget may include tax increases
At Tuesday’s Board of Supervisors meeting, Caroline County Administrator Charlie Culley will present a proposed budget that could result in higher taxes.
The proposed budget will include first payments for at least two major projects the county undertook in the past year: the new radio communications system and renovations for Caroline High School and Madison Elementary School.
The costs associated with these two projects alone have the potential to increase the real estate tax rate 10 cents per $100 of assessed value.
The radio system, which the county was required to update under a federal mandate, will cost county taxpayers about $8 million. The county will borrow about $6.6 million from Bank of America for 12 years at an interest rate of 2.53 percent.
The county will pay only interest payments for the first two years, but after that it will pay interest plus principal every year for 10 years.
The radio system costs about $6.2 million and the additional funds will be used to purchase equipment not included in the contract with Motorola.
The first-year payment will be $166,324 in the fiscal 2015 budget.
That project alone could add about 3 cents to the county’s real estate tax rate.
The second major project that the county will begin paying for this year is renovations to two of the county’s schools.
Renovations to Caroline High School will cost about $21 million, and renovations to Madison Elementary will cost about $4 million.
Last November, 81 percent of Caroline voters authorized the county to borrow the money to pay for the renovations.
Under the advice of the county’s financial consultant, Davenport & Company Inc., the board approved the financing for the project.
The county selected the plan proposed by SunTrust, which has a 15-year fixed rate and a 20-year amortization.
That plan will cost the county $34.62 million—the $25 million cost of the construction, plus the cost of issuing bonds, plus interest. The county will borrow the money at a locked-in rate of 3.17 percent over 15 years.
The first debt service payment, $1,722,453, would be in the fiscal 2015 budget.
This could add another 7 cents to the real estate tax rate, according to the county’s financial consultant’s presentation.
In addition to those projects, a large portion of the proposed budget will likely be allotted to the school system’s other needs.
The School Board and Superintendent Greg Killough are asking the county for $14.6 million—a 10 percent increase over what was requested last year.
The request includes paying for adjustments to teacher salary steps, raises for support staff and 17 new positions.
The current county budget is $81.8 million, and about $41.8 million was for the general fund.
The real estate tax rate is currently 72 cents per $100 of assessed value. It was not raised last year when the supervisors adopted the budget.
Each penny on the tax rate brings in about $250,000 in revenue for the county.
The meeting begins at 6 p.m. Tuesday in the Community Services Center, 17202 Richmond Turnpike, in Milford.
Robyn Sidersky 540/374-5413