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The Franklin News-Post
P. O. Box 250
310 Main Street, SW
Rocky Mount, Virginia 24151
Fax: 540-483-8013

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Ending county decal creates budget snag for 2013-14

Wednesday, February 20, 2013

By CHARLES BOOTHE - Staff Writer

This spring will be the last time Franklin County residents will be required to purchase a vehicle decal, but starting this fall the cost of the decal will be included with personal property tax bills.

However, a state limit on how much money can be collected from the fees during a calendar year has placed the county in a position to come up short about $250,000 in the vehicle fee collections during fiscal year 2013-14.

On Tuesday, the board of supervisors approved advertising for a public hearing on a new ordinance that would make up the shortfall over the course of three years.

The shortfall scenario is complicated, and county Finance Director Vincent Copenhaver told the board it starts with the decal purchase this April, when residents will be required to place the last decal on their vehicles at a cost of $25.

That money will be included in this year's budget.

The money collected with this fall's personal property bills, which are due in early December, will be included in the fiscal year 2013-14 budget, Copenhaver said.

The problem is, he said, the state has a limit of $40.75 on how much municipalities can collect from those fees in one calendar year. Since money from the decals and personal property tax bills will both be collected during calendar year 2013, the total amount cannot exceed $40.75.

In other words, the decals cost $25 and the county can collect no more than $15.75 on vehicles in personal property taxes this fall. That is a total of $40.75 for calendar year 2013.

Copenhaver said the state has that limit because that is the total vehicle registration fee charged by the state.

With a decrease in collections from the usual $25 to $15.75, the county will lose about $450,000 in fiscal year 2013-14, Copenhaver said.

"Some of this loss (about $200,000) will be compensated for by greater participation from our citizens once this fee is added to their personal property bills, although a remaining shortfall of $250,000 should be anticipated for the fiscal year 2013-14 budget," Copenhaver told the board.

That's because, he said, some vehicle owners may not purchase a decal or use one for more than one vehicle. With the fees added to the personal property tax bill, money will be paid that otherwise may not be.

Copenhaver said the county will have a better idea of how much more money will be collected this way after December.

To make up the rest of that anticipated shortfall, the public hearing will address a plan to increase the fee on a one-time basis on personal property tax bills in 2014 from $25 to $34.75.

In other words, under this plan, during the three fiscal years from 2012-13 to 2014-15, the total amount residents will pay in fees for a vehicle remains the same -- $75.

The difference will be in the amount collected each fiscal year: $25 for 2012-13, $15.75 for 2013-14 and $34.25 for 2014-15.

The board also considered using money from the county's fund balance to make up the difference, but decided not to do that.

The proposed ordinance will now go to a public hearing, set for March 20, and the fees may be readdressed when budgeting for the coming fiscal years.

In February 2012 the board agreed to eliminate the county decals this year, and to charge a vehicle licensing fee that will be a part of the personal property tax bill.

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