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Slavery museum's tax district could yield $200,000 per year
How would a special tax district in Celebrate Virginia work?

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Date published: 8/17/2001

The Fredericksburg City Council is interested in creating a special tax district to repay its contribution to a slavery museum that organizers may locate in the city.

The council has tentatively pledged $1 million to former Gov. L. Douglas Wilder's proposed slavery museum, if he opts to put it in the city.

The money would be repaid to the city through the creation of a tax district in the Celebrate Virginia development, where Silver Cos. Chief Executive Officer Larry Silver has promised to donate 20 to 25 acres.

The City Council must hold two more votes and a public hearing on the tax district before it can go into effect.

Details about how it would work remain to be determined, but the following questions and answers provide some explanation.

Q: What is a special tax district?

A: It is a designated area in which the owners of the land pay additional real-estate tax. The funds generated through the additional tax levy go toward improvements within the district.

Q: How would the special tax district proposed for Fredericksburg's side of the Celebrate Virginia development work?

A: The Silver Cos., owners of the land, would pay additional real-estate taxes that would go into a fund to repay the city's $1 million contribution, plus interest. The tax would end once the money is repaid.

Real-estate tax is based on the assessed value of a piece of property. In Fredericksburg, the tax rate is $1.13 per $100 of assessed value.

Assistant City Manager Beverly Cameron explained that if the property within a special tax district is assessed at $200 million, and the additional tax levy is 10 cents per $100 of assessed value, then the annual tax district revenue would be $200,000.

The additional tax levy has not yet been determined. Cameron doesn't know whether the additional tax would begin right away or after the land is developed.

Q: What does the law say about tax districts?

A: The Code of Virginia states that a governing body may create a tax district, also referred to as a service district, "to construct, maintain and operate such facilities and equipment as may be necessary or desirable to provide additional, more complete or more timely governmental services within a service district."

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