County investments, revenues impact budget

The deepening recession is expected to slash Augusta County’s personal property tax revenues and investment income by almost $3 million next fiscal year, officials say.

The county estimates a drop of $1.25 million in investment income, and Augusta County Commissioner of the Revenue Jean Shrewsbury said personal property revenue is expected to drop $1.6 million.

Shrewsbury said the personal property drop is a combination of fewer people buying new cars and the increased depreciation on sports utility vehicles.

When gas prices jumped to $4 last year, SUVs took a depreciation hit, Shrewsbury said.

And before the economy began sliding, Shrewsbury said she could count on 30 percent of car owners to buy new wheels. That is no longer the case.

“Even if people need to change vehicles, they are not going the new vehicle route,” Shrewsbury said. “Until the economy turns, the public will not be purchasing new vehicles.”

Shrewsbury said the decline in personal property revenues is the steepest she’s seen in 13 years in office.

The county still will make money on its investments, but interest revenue also will drop, Augusta County Administrator Pat Coffield and Treasurer Richard Homes said.

Homes is hoping for a 2 percent return on the county’s investments during the upcoming fiscal year.

“We are limited to what we can invest in,” Homes said. “Due to the economy, things are not going well. We haven’t lost; we are just not making as much,” he said.

Homes said a portion of the county’s investments are in a local government investment pool in which the vast majority of Virginia local governments participate. He said the current return on those investments is about less than 1 percent in interest.

A resurgence in personal property revenues isn’t likely to come soon, Shrewsbury said. Until the economy turns the corner, people will shy from buying new vehicles, she said. And that will translate into a flat personal property revenue picture.