After Avula proposes ‘modest’ real estate tax relief, 3 Council members push for more
With tax policy on the ballot in Richmond this fall, the City Council is headed for another decision point on how to balance City Hall’s spending needs with the affordability crunch hitting many local households.
The city’s real estate tax rate — $1.20 per $100 of assessed property value — hasn’t been lowered since 2008. But three City Council members think the city can do more than the one-cent reduction favored by Mayor Danny Avula.
The mayor has suggested knocking one cent off the city’s real estate tax rate and slightly lowering the meals tax rate, which Avula has described as “modest reductions.” The mayor has said he’ll pursue the two decreases as long as voters approve a new 1% sales tax in November to raise revenue for the construction and renovation of public school buildings.
Graham Moomaw
Last week, Avula explained his proposal as an attempt to take advantage of a new taxing authority the General Assembly has given the city to improve school conditions, while responsibly granting residents some relief from higher bills.
“We don’t want to just promote a tax increase without being thoughtful about people’s finances,” the mayor told reporters after a groundbreaking ceremony in the Diamond District.
Councilor Reva Trammell (8th District), one of the members pushing for a larger decrease of four cents, called Avula’s proposal “a joke.”
“It makes me wonder what the hell is going on. What is this mayor thinking? All he thinks about is tax, tax, tax,” Trammell said.
In February, the Council passed a non-binding resolution asking the Avula administration to consider building the next city budget on a real estate tax rate of $1.16. The administration initially resisted the idea, but seemed more open to it after the Council agreed to apply it to next year’s budget-writing process instead of the one the city completed this spring.
Now, the Council will consider making that suggestion mandatory, not optional.
An ordinance to lower the real estate tax rate to $1.16, which would have the force of law if approved, was formally filed last week. In addition to Trammell, the proposal is being sponsored by Councilors Stephanie Lynch (5th District) and Sarah Abubaker (4th District).
Depending on how the Council chooses to proceed, the body could end up voting on the real estate tax rate before Richmonders give a verdict on the sales tax plan to fund schools.
Graham Moomaw
After the Council’s August break, that proposal is set to go to the Council’s Finance and Economic Development Committee on Sept. 16.
The tax relief ordinance would set a $1.16 rate for the 2028 tax year, which means it would effectively lock in a lower rate heading into next spring’s budget cycle and require Avula to balance city spending accordingly.
For a typical home valued at $400,000 with an annual tax liability of $4,800 at the current rate, a one-cent reduction in the tax rate would save the homeowner $40. A four-cent reduction would save $160.
A slight reduction in the rate wouldn’t necessarily work out to a smaller tax bill for all homeowners, because strong growth in a property’s taxable value could more than offset a small reduction to the rate at which that value is taxed. If a $400,000 home sees a 10% assessment increase to $440,000, that would add $480 in taxes at the current rate, $436 with a one-cent reduction and $304 with a four-cent reduction.
The exact impact will vary by property. Richmonders won’t be able to get an up-to-date calculation until the next round of home reassessment notices go out. That would usually happen in September, but because the city is in the midst of a one-year assessment freeze, the next round of notices should go out in the spring of 2027. Tax bills for calendar year 2028 will be based on the property values in those notices.
Real estate tax revenue is the largest single funding source for Richmond’s general-fund budget, and tax collections have grown substantially over the last decade due to the city’s growth and hot housing market. In fiscal year 2018, the city collected a little under $250 million in real estate taxes. In the budget officials passed in May, the city projected more than double that, building a spending plan around about $510 million in projected real estate taxes.
Avula said his plan was based on a hard look at the city’s financial projections and how much revenue City Hall needs to make substantial improvement in things like technology, the water system and all the other ways residents interact with local government.
“I understand it. I would want to lower taxes for everybody if I could,” Avula said. “But we’ve got to do the work with Council to bring them in, to have them look at projections, to have them really understand when you look five years out or ten years out what the anticipated needs of the city are.”
Avaula and other city officials have argued an across-the-board real estate tax reduction would disproportionately benefit owners of the city’s highest-value properties, because property owners with the highest tax bills would see the biggest total-dollar discount from a lower rate. The city doesn’t have the power to tax property at different rates based on the owner’s income or wealth.
Some Council members argue it’s not the city’s wealthiest being squeezed most by higher costs and seemingly ever-growing bills.
Abubaker said the city’s focus on affordability at times seems to overlook the middle class.
“I appreciate that the mayor now recognizes the need for tax relief, but a one-cent reduction simply doesn’t match the financial pressures families are facing,” Abubaker said. “A four-cent reduction is a responsible step that provides meaningful relief while recognizing that affordability isn’t just about housing — it’s about the rising cost of everything.”
Abubaker, a co-sponsor of the four-cent reduction Council will take up next month, said the city shouldn’t “force residents to choose between supporting our schools and receiving tax relief.”
Proposals to reduce the city’s tax rate without the mayor’s blessing have repeatedly failed when put to a Council vote. It’s not yet clear how the Avula opening the door to a one-cent reduction will or won’t change that dynamic.
Lynch, a self-described “progressive liberal,” said Richmond has to get serious about spending within its means.
“At what point do you practice some tighter fiscal management for the sake of ensuring that you’re keeping the cost of living low for your residents?” Lynch said. “There’s a balance for that. The residents have said ‘We’re getting taxed out.’ Quite literally.”
Contact Reporter Graham Moomaw at gmoomaw@richmonder.org
