Hampton City Council passes region’s largest real estate tax reduction

In response to high real estate assessment values, the Hampton City Council approved a sizeable cut to its real estate tax rate Wednesday night.

The council voted for a budget that includes a real estate tax rate reduction of 6 cents per hundred dollars of assessed value — from $1.24 to $1.18. It’s the largest reduction of any city in the region this year, but several other localities still have lower tax rates.

“I want to commend my team that has worked so hard to put forth a budget that can honor, respect and reward our talented workforce, but also honor and respect and provide tax relief for our residents,” Hampton City Manager Mary Bunting said.

The City Council also approved a measure that values automobiles at 75% of their assessed value for tax purposes because the value of used cars and trucks is inflated. The inflated values were caused by increased demand for used vehicles when a microchip shortage slowed the production of new ones.

Home values in the city have increased by about 16%, which places most at or above where they were before the Great Recession that began in 2007, according to Bunting.

In a letter to the council, Bunting said she wished she could reduce real estate tax rates further, but the city is feeling the burden of inflation, particularly on gas and car prices. Among its vehicle costs, the city has to pay for gasoline for police cars, fire trucks, ambulances and trash trucks.

The budget was drafted with the expectation that the state would eliminate the sales tax on groceries — something Gov. Glenn Youngkin touted as a priority — but the state still hadn’t adopted its budget. The estimated revenue from the tax for Hampton is about $3.3 million. If the state doesn’t eliminate the tax or chooses to reimburse municipalities for the loss, Bunting said the city could amend the budget and use the money to further decrease the real estate tax rate or invest in city projects.

The approved $581,958,724 budget provides city employees with raises ranging from 5-7%. The largest raises will be for 911 operators and sworn public safety officers — those positions are the most difficult for the city to fill and retain employees.

Bunting said the region has 44,000 fewer people in the workforce than before the pandemic.

Hampton is making an effort with its budget to attract employees while also increasing the pay for those who work for the city to retain talent.

This effort also includes teachers. The budget provides money for 5% raises to teachers and $2.1 million in step increases for experienced teachers.

Jason Samuels came to Wednesday night’s meeting to praise the budget as both a private citizen and a school board member.

“I firmly believe that it is a very solid budget,” Samuels said. “It was well-vetted and laser-focused.”

Jessica Nolte, 757-912-1675, jnolte@dailypress.com