Surry County is proposing to lower its real estate tax rate to 75 cents per $100 of assessed property value in light of a sharp rise in home valuations.

Surry had raised its real estate tax rate from 71 cents to 77 cents in 2021 to adjust for rising expenses coupled with a projected drop in revenues — most notably from a $710,000 reduction in public service corporation taxes Dominion Energy’s Surry nuclear power plant pays. Those taxes, which account for more than half the county’s annual revenue, are projected to go back up by $1.1 million this coming fiscal year. Despite the projected increase, as of May 4 when Surry advertised its proposed 2022-23 budget, the county had planned to leave the 77-cent rate unchanged.

Now, with nationwide inflation and supply chain issues affecting the housing market, a rate of 70 cents per $100 of Surry homes’ new assessed values would yield the same real estate tax revenue as last year’s 77-cent rate, according to County Administrator Melissa Rollins.

Leaving the rate at 77 cents under the inflated valuations would impose an “effective tax rate” increase of 7 cents on homeowners, Rollins said. As such, she’s now recommending the rate be lowered to 75 cents.

Residents who spoke at a May 12 public hearing on the matter, however, argued the latest 2-cent reduction doesn’t go far enough to offset the effects of inflation.

“Consider the fact of how much gasoline prices have risen,” said Helen Eggleston, who told the Board of Supervisors that the assessed value of her home in Dendron had risen by roughly $22,000.

“Most people who are not employed either by the county, the post office, or a farmer, they have to drive an average of anywhere from 20 to 30 miles to go to work,” Eggleston said. “I have to drive to Wakefield for groceries.”

Robert Chandler, of the county’s Bacon’s Castle District, said his home’s assessed value had risen $112,000.

“It had stayed pretty much the same for many years,” Chandler said. “My home is 30 years old. … that’s a significant impact on a county where the mean income is only $30,000.

“Mine went up $91,000,” added Surry District resident Bill Etchison. “You look at the inflation right now … you’re going to put some farmers out of business.”

“What kind of service does Surry provide that would justify an increase in taxes?” asked Jeremiah Williams, also of Dendron. “I’d like to know because I haven’t seen it.”

Surry’s supervisors were sympathetic.

“I hear you,” said Dendron District Supervisor Michael Drewry.

Surry District Supervisor Timothy Calhoun agreed the proposed 75 cent tax rate should be reduced further, and asked that county staff work with Surry’s school system to “see if they can also reduce their request.”

Surry County Public Schools has proposed a budget of just under $20.8 million for the 2022-223 school year, a nearly 19% increase over the current school year’s $17.49 million budget. While the majority of the increase would come from an anticipated $2.6 million increase in grant funding, Superintendent Dr. Serbrenia Sims’ proposed budget also includes a requested an increase of just over $220,000 in local funding.

“Having only approximately 650 students in the school system, at the amount that we pay … that’s expensive,” Calhoun said, but acknowledged “our hands are tied” with the roughly 5% annual raises for teachers mandated in Virginia’s proposed 2022-24 biennial budget.

Former Gov. Ralph Northam, before leaving office in January, had included annual 5% raises for teachers in his final proposed state budget. Since then, the Democratic-controlled state Senate has proposed adding a 1% bonus on top of the 5% raise for the 2022-23 school year, while the Republican-controlled House of Delegates has proposed 4% annual raises and 1% bonuses over the next two school years.

Board Chairwoman Judy Lyttle reminded attendees that she and her fellow board members, as taxpaying residents of the county, are not immune to the effects of inflation.

“The same thing that’s impacting you is going to impact us,” she said. “We have one of the best school systems … when we’re spending dollars there, we’re spending it on our children.”

Claremont District Supervisor Robert Elliott added that even at the current 77-cent rate, Surry’s real estate tax is the second lowest in the region. Only Sussex County, which charges 58 cents per $100, is lower.

“Education is expensive,” Elliott said. “Sheriff vehicles, emergency services, everything that we said that we need, not want, it’s costly.”