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City manager explains confusing "effective tax increase" ad; says rate not changing
Summary
The city manager told council the 'effective tax increase' language is a state advertising requirement triggered when real estate revenue grows more than 1%; he emphasized the city is not proposing a change to its $1.24 per $100 tax rate this year.
The city manager explained a state requirement that forces localities with more than 1% growth in real estate revenue to run an advertisement that can be read as an "effective tax increase" even if the nominal rate is unchanged. "We are not proposing to change the tax rate this year," the city manager stated, adding the law requires jurisdictions to calculate the hypothetical rate that would keep total revenue flat and then advertise the differential.
He told council the ad language is prescribed by the state and can be confusing for residents; he said the city added clarifying language where allowed and noted this is the first time in over a decade Hampton has hit the revenue growth trigger. Council members accepted the clarification and were advised the operating budget still requires two readings in May, while the CIP requires one hearing and a vote.
