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The new ad valorem tax rate passed by the Washington City Council will increase the projected amount levied by 28.10% in the coming fiscal year 2025-2026. While the new rate is lower than the previous year, a recent revaluation completed by Beaufort County resulted in increased property values for the city’s tax base, which means many residents may see increased tax bills despite the lower rate.

On Tuesday afternoon (June 17), council members unanimously adopted a tax rate of .485 cents per $100 value. The city projects to collect 97% of taxes in 2025-2026, city budget documents show. 

Calculations by the City of Washington show that the revenue neutral tax rate for 2025-2026 is 0.3775 cents per $100 valuation, but its budget shows a proposed .485 cents per $100 valuation of estimated taxable property. 

(Revenue neutral tax rates are calculated based on assessed values of residential and commercial property within a county or city. Revenue neutral tax rate maintains a city or county-wide tax bill the same year to year, despite changes in the tax base.) 

The proposed .485 cents tax rate is a decrease of .095 cents from the previous year which was .580. Washington, according to City Manager Jonathan Russell, has maintained a tax rate in the 50-cent range for approximately two revaluations or 16 years since revaluations occur every eight years.

Russell shared with the Daily News that the projected tax levy at .485 cents is $7,471,959.  

The projection represents an increase in the tax levy of 28.10% over the prior rate. Details can be found at the top of page seven in Budget to Council 2025-2026. 

Russell told the Daily News and City Council on Tuesday that not everyone will see that increase and the new tax rate will “affect everyone differently.” 

“We were at 58 cents. We’re pushing our rate down. The revenue neutral rate is kind of a moving target; it results in varying financial impacts across the community based on the new valuation,” he said. 

According to Russell, Washington in the last five years has seen growth between six to eight percent each year which includes residential and commercial developments. For example, the development of or additions to several neighborhoods like Moss Landing, Wheatfield and Somerset. 

Russell explained that the city’s new tax rate is a result of the revaluations Beaufort County completed earlier this year.

Beaufort County’s Tax Assessors office went through a revaluation process in March. Based on its numbers, the assessed valuation of residential and commercial property for 2025-2026 in Washington is $1,583,499,045. Prior to revaluation the assessed value was $1,005,721,926, according to the City of Washington. The 2023-2024 valuation for the city was $972,809,828. 

For comparison’s sake, Beaufort County’s Signed Budget Ordinance for 2025-2026 shows a levied tax rate of .445 cents per $100 valuation. The revenue neutral tax rate was calculated at .4451 cents. “The tax rate in the prior year, before the property tax revaluation occurred, was 62.5 cents. The tax rate was cut in the FY 21-22 budget by $0.01, and because the revenue neutral tax rate is used in this budget, the rate remains flat for the fifth straight year despite increased inflation pressures. At the assumed collection rate, this will generate approximately $42.25 million in property tax revenues,” the County Manager’s recommended budget shares. 

Chris McLaughlin, a professor of Public Law and Government at UNC-Chapel Hill, explained, “If the county adopts a new property tax rate that is greater than the revenue neutral tax rate, then the county has increased its total tax levy for the coming fiscal year–even if the adopted rate is less than this year’s tax rate. Conversely, if the county adopts a new tax rate that is less than the revenue neutral tax rate, then the county has decreased its total tax levy–even if the adopted rate is greater than this year’s tax rate.” 

Though McLaughlin wrote about counties, the same concepts can be applied to municipalities. 

Property taxes in North Carolina are used by municipalities and counties to pay for services like K-12 education, library services, water and sewer, electric, trash service and public safety, housing initiatives, infrastructure maintenance, community and environmental services and general government expenses. 

Looking at Washington, property taxes will go toward hiring four Washington Police Department patrol officers for positions that were either vacant or frozen and four additional paramedics. Russell said adding four paramedics will have a large impact on city residents, because it will allow the city to operate two ambulances simultaneously 24 hours, seven days a week. 

“That’s something we’ve been working on over the past three years – hiring four paramedics each year to get 12. Being staffed with 12 paramedics will allow us to operate two ambulances simultaneously,” Russell  said. Public safety, he said, was the “big focus” of the 2025-2026 budget. 

Russell continued to say that for many years Washington has not operated two ambulances at one time. “This will be the largest improvement where public safety is concerned,” he added.

He added that there was a 17% increase in health insurance for city employees. Health insurance is provided by BlueCross BlueShield. 

The City of Washington’s total budget amount for 2025-2026 is $146,235,421. A portion of the budget reflects funding Washington-Warren Airport received from the North Carolina General Assembly for capital improvement projects. Over several years, the airport received a total of $33 million which has been spent on multiple improvement projects. The city’s budget on average has been between $110-$118 million in previous years.