New programs include Real Estate Tax Relief and local Small Business Assistance grant
On June 23, the Botetourt County Board of Supervisors unanimously adopted an innovative FY21 budget that included a $2.7M reduction in spending, a one-time Real Estate Tax Relief Program equal to 5 cents on the Real Estate Tax rate and a local Small Business Assistance Grant program.
Just before the vote, the budget sub-committee outlined a 4-step financial priorities road map used to create what would be adopted as the final FY21 budget. The four steps included reducing expenses, assessing tax realities, providing relief, and addressing needs.
“This was masterful budget work,” Supervisor Steve Clinton said. “County Administration and the Budget Subcommittee really went above and beyond to meet the needs and concerns of all citizens and I couldn’t be more pleased with the results.”
The new budget reflects a $2.7M reduction in spending as well as cost savings accumulated through an FY20 freeze on hiring and discretionary spending, funds leveraged from repurposing county buildings, and concerted efforts to extend the lifespan of standard school buses and sheriff vehicles by one year.
While cutting back and limiting spending is a common technique for communities facing budget shortfalls, there are two especially unique aspects of the new FY21 Botetourt County budget that deserve special attention.
Real Estate Tax Relief
Leveraging general fund savings, Botetourt County plans to supplement the FY21 property tax for all private property owners in Botetourt with a relief amount equating to more than 70% of the overall reassessment increase, essentially providing a one-time relief of $0.05 per $100 of property value.
This is an unprecedented maneuver, and to do this under existing laws, which prohibit direct tax rebates, the county must involve a third party. The County has selected Virginia Community Capital (VCC), a non-profit Bank and Community Development Financial Institution (CDFI), to process a voluntary donation for the purposes of emergency relief for the citizens of Botetourt.
Here’s how it will work:
By August 5, 2020, the County Treasurer will provide VCC with a list of all County Taxpayers and County Real Estate Parcel tax burden for 20/21 tax bills. By August 8, 2020, the County will pay VCC the sum of $2.3 million (The Grant) plus transaction and legal costs (est. $10,000) as a voluntary donation for the purposes of emergency relief for the citizens of Botetourt.
VCC will then pay the sum of the Grant directly back to the Botetourt Treasurer in a “Tax Relief Donation” that will be spread across the real estate parcels for COVID-19 tax relief. The Treasurer will then credit each property account the Tax Relief Donation accordingly. The amount of the Tax Relief Donation will appear as a credit on the physical tax bills sent to each taxpayer for each parcel along with any other payments or credits. Any unused tax credit allocations will be returned to Botetourt County within 14 business days.
“This is a completely new idea and process. In order to make it work for our community, we had to involve our Attorney Mike Lockaby, our auditor Corbin Stone at Robinson Farmer Cox, Bill Arney, Botetourt County Treasurer and our partners at VCC,” County Administrator Gary Larrowe said. “If any one of them said it couldn’t or shouldn’t be done, we would to have had to go back to the drawing board but, to our delight, everyone’s collaboration and innovation really came together and created an opportunity that I don’t believe anyone in Virginia realized was possible. This provides tax relief to the shareholders of Botetourt County and protects the tax base for the future post COVID-19 era.”
Local Small Business Assistance Grant
In addition to the Real Estate Tax Relief, Botetourt’s new budget includes funding for a local small business assistance grant program. Local businesses will be invited to apply for up to $5,000 worth of direct assistance with professional service costs such as legal, accounting, marketing, ecommerce software, website development, technology hardware and/or lost inventory and sunk costs.
To be eligible, small businesses must be a sole proprietorship, an LLC, or self-employed person recognized as a business entity physically located and based in Botetourt County. They must have filed with the SCC and been a qualified business in Botetourt by February 29, 2020 and employ 100 or fewer people and have experienced a COVID-19-related impact, specifically closure or suspension of business operations. Agricultural production operations are exempt from the SCC filing requirements; however, documentation must indicate the business was operational on February 29, 2020. All businesses must have been and continue to be in compliance and good standing with all local ordinances, county tax rolls, and fee assessment.
Grants will only cover one business per person or immediate family member however can be used for a wide variety of purposes including; legal fees (with the exemption of filings for bankruptcies), accounting fees, marketing plan development & execution support (including media spend, e-commerce activities including point of purchase software and other necessary software or web services subscriptions, website development, and web updates), technology, computer, printer, camera, or cash register purchase (hardware is limited to $1,500 of any grant) (receipts will be reimbursed or a purchase can be arranged through the EDA as a last resort), lost inventory or sunk costs – up to $1,500 of documented loss (food spoilage, for example may be claimed with proper documentation of loss and certification that the loss was not covered by other means or programs).
Board Chairman appointed the Budget sub-committee that was made up of Dr. Richard Bailey, Mr. Steve Clinton and citizen representative Mr. John Williamson.
“In planning for FY21, the sub-committee has built a budget that addresses the immediate and very real community needs during this pandemic while looking ahead to also prepare for longer term community priorities and recovery efforts. This approach has required an intentional balance between fiscal responsibility and crisis support for citizens while allowing the Board of Supervisors the maximum amount of budget flexibility available,” Martin said.
The FY21 budget also addressed several new and existing community needs deemed to still be priority efforts and allocated funds for expanding broadband access, completion of Colonial Elementary School construction, library subscriptions to support online reading applications for students, and a senior transport van to help address social distancing requirements and COVID-19 safety measures for the community’s most vulnerable populations.