The Richmond City Council canceled a special meeting that was supposed to be held Monday night for the purpose of finalizing a decision on whether the city's real estate tax rate should stay the same or be reduced by 4 cents.

The council has been debating the issue for weeks, and was expected to end its deliberations at a meeting that was added to the calendar specifically to allow more time on the tax discussion. The council made that decision on Oct. 10, reversing itself weeks later as the Oct. 28 meeting approached.

Calling off that meeting means the council won’t take a vote on the tax rate until its next meeting on Nov. 12, after next week’s elections when several council incumbents are trying to beat political challengers running for their seats.

Council President Kristen Nye (4th District) said the special meeting was canceled after it became clear some council members wouldn’t be able to attend. She said there was a “consensus” to delay the matter again instead of holding a meeting that might have ended with the council being unable to pass anything.

“Even if we had seven, we have to pass the tax paper with five,” Nye said of the council attendance and voting math.  “And it didn’t seem likely that we were going to have enough people to pass either tax paper.”

Nye said she was unaware of any members expressing discomfort about taking a difficult vote so close to the election. But she acknowledged election season is part of the “scheduling and logistics” issue.

“Several council members are in competitive races, so people are being pulled in a lot of directions,” she said.

Councilor Reva Trammell (8th District), the main sponsor of the proposal to reduce the tax rate to $1.16 per $100 of assessed property value, said she was “very upset” the council was making another late-breaking decision to delay voting on her ordinance.

“They could’ve called in. They could’ve done a Zoom,” Trammell said. “They could have done something.”

Nye has put forward a competing proposal to keep the tax rate unchanged at $1.20, the same rate the city has had since 2008.

Even though the rate hasn’t changed, tax bills and city revenues have grown significantly over the last few years as Richmond’s hot real estate market has pushed property values upward.

Trammell has argued the city has enough money to afford to give people a break on their 2025 bills by lowering the rate 4 cents, which would save the average homeowner roughly $150.

Mayor Levar Stoney’s administration has opposed that proposal, suggesting a one-time tax rebate that would give the average homeowner about the same $150 in relief for 2025 without lowering the rate for future tax years. An across-the-board rate reduction, the administration has argued, would disproportionately benefit the city’s wealthiest property owners who have the highest real estate values.

Stoney has also proposed a new pair of targeted relief programs geared toward low-income homeowners and renters, as well as older and disabled residents.

State law requires the council to consider rolling back the tax rate due to the size of the average increase in real estate assessment notices that went out to Richmond property owners in early September.

That law also requires the council to purchase notices in local newspapers advertising when the council will hold a public hearing on the tax rate question. Because the council keeps putting the issue off, the council staff has had to publish four different notices in the Richmond Times-Dispatch and the Richmond Free Press, according to Council Clerk Candice Reid.

“Each time the public hearing date is continued, we must place a new ad and post physical notices in the building,” Reid said in an email. The cost to run those public notices was $10,652.

The delay in consideration of the two tax rate ordinances will allow the council to take that legally mandatory vote as the body is voting on the tax policies proposed by the mayor.

The Stoney administration has said the new housing relief programs it proposed can only be funded if the city leaves the tax rate unchanged and collects the extra revenue that comes with it. 

Because assessments rose citywide by 6.68%, above the 4% growth the city’s current budget anticipated, the city will take in roughly $12 million more than expected.

Supporters of Stoney’s proposal have portrayed it as a compromise that provides some help for homeowners in 2025, boosts targeted relief for those who need it most and avoids structural changes to city tax revenues that might throw future budgets out of balance.

Critics have said the city should do more to slow the growth in property tax bills or risk losing moderate-income residents and businesses to surrounding counties with cheaper cost of living.

Administration warns rate reduction might threaten Southside land deal

The administration has suggested spending $4.1 million of the $12 million in extra revenue to fund the tax relief programs Stoney proposed. Another $4 million was proposed to pay for the potential demolition of buildings on a South Richmond parcel of land the city is considering buying from Philip Morris USA and its parent company Altria.

The city envisions using the land, where developers previously wanted to build a casino before voters rejected it, as a public park and a site that could possibly attract future economic development.

If the rate were lowered to $1.16, the administration said at a council committee meeting last week, that land deal in Trammell’s district might not go forward.

“If this $4 million is not approved, it’s more than likely we will not purchase that building,”  Sabrina Joy-Hogg, the city’s deputy chief administrative officer for finance and administration, told the council’s Governmental Operations Committee.

The Stoney administration has proposed funding the one-time tax rebate with roughly $16 million from surplus funds remaining from the city’s previous budget cycle.

At the committee meeting last week, Councilor Ellen Robertson (6th District) continued to push back on the administration’s stance on the tax rate. Without the rebate, she suggested, some of the $16 million left over from the last budget year could cover the projected $3.2 million hit to this year’s budget if the tax rate were lowered by 4 cents.

“We do a lot of services beyond what we have to do. They’re great. They’re nice things. But if we’re pricing people out of the city at the same time, I’m not sure we’re making wise decisions,” Robertson said. “We haven’t agreed that we want to demolish Philip Morris. We haven’t agreed that we want to purchase it.”

Trammell too seemed upset by the administration’s claim an economic development effort in her district would be derailed if the council passed her proposal.

“Something is not adding up, Lincoln. Something is not adding up,” Trammell told Chief Administrative Officer Lincoln Saunders.

Saunders insisted the $4 million needed to cover demolition costs in addition to the $5.5 million to buy the property had already been discussed and should have come as no surprise to Trammell. Though the $5.5 million for the land purchase can come out of $10 million in capital improvement funding the city has already allocated for Southside economic development, Saunders said, funding for demolition has to come from the city’s general fund.

“When we realized we needed to find $4 million in cash… this is the only source we could identify,” Saunders said. “It’s unfortunate that it seems like it’s pitting these two issues against each other.”

The council committee voted to advance the administration's tax proposal to the full council with a recommendation to approve it.