BY STEFANIE BOWMANN, Eastern Shore Post —
Northampton County officials are proposing a two-cent real-estate tax hike to make up for revenues that have dropped or are stagnating.
“It’s the last thing I want to recommend, but … I know that people want services that we have to provide, too,” said County Administrator Charlie Kolakowski on Tuesday, May 13.
Northampton’s current real estate tax rate is 68.5 cents per $100 of assessed value, which will rise to 70.5 cents if supervisors approve the county administrator’s recommendation following a June 10 public hearing.
A Northampton resident who owns a $250,000 home would pay $50 more a year in real estate taxes – $1,762.50, up from $1,712.50.
John Coker, chair of the Northampton Board of Supervisors, noted that “deficient tax revenue” led to an approximate $600,000 gap in the county’s proposed fiscal year 2026 budget.
Kolakowski had originally suggested filling the gap using Northampton’s undesignated fund balance, or rainy day fund, with the expectation that the funds would be replenished over time.
Coker said, “Now the consensus is that may or may not happen,” so the county administrator is proposing a tax increase this year to avoid a “double tax increase” next year.
The decreasing tax revenues contributing to the shortfall include sales taxes, which, as of January, were expected to bring in $2 million, or $150,000 less than in fiscal year 2025.
Transient occupancy taxes, which are collected from temporary lodgings such as hotels and vacation rental homes, were anticipated to generate revenue of $620,000 in Northampton County at large, or $130,000 less.
The collection of sales, transient occupancy taxes, and meals taxes this year is “behind plan,” Coker said.
There are also other factors at play in declining confidence in Northampton’s ability to balance its revenues and expenditures.
The county is planning to raise its real estate tax collection rate this year from 97% to 98%, but that feat will be difficult to top in the future.
“You can only collect past-due money one time,” Kolakowski added.
The cost of health care for county employees “only went up 4%” this year, but Northampton might not be so “lucky” next year, he said.
Coker also noted that “our capital accounts are depleted now.”
One of the biggest hits to the budget was taken by Northampton County Public Schools, which lost $1 million in state funding due to an increase in the local composite index — a number that represents how much money Virginia expects the county can afford to contribute toward the cost of its public education.
Northampton’s composite index rose 4.6% to 0.5253. Of the public education costs that the county shares with the state, Northampton must pay more than 52.5%.
Rising real estate values due to inflation and housing demand are partly to blame for the increase in the local composite index.
“Prices aren’t going down,” Coker said. Contractors are increasing their prices “to the point where the people are thinking they can’t continue to pay for the house that they’re building,” even in more affluent neighborhoods like Bay Creek and Tower Hill.
Supervisor Dixon Leatherbury said inflation is continuing due to COVID-19-related federal spending from two to four years ago.
Vice Chair Oliver Bennett was concerned about how a tax increase would impact the “elderly and those who may be less fortunate.”
Supervisor Betsy Mapp noted that a real estate tax increase also “translates into hundreds of dollars more for the average farmer.”
“We’ve tried to control spending as much as possible,” Kolakowski said.
“I’d look all the way across the board tonight and say, ‘What can I cut back on in Northampton County?’” Bennett said. “I may be a disliked person, but I’d be looking and let the chips fall where they may.”
“Twenty dollars is a small amount to you and I,” he said to his fellow supervisors. “But there are some … $20 is a good amount to them.”
