While Gloucester taxpayers will experience a 3¢ increase on their real estate tax rate as a result of the recently approved budget, the FY 2023 budget, a new personal property tax classification on vehicles has allowed county supervisors to lower the vehicle tax from $2.95 to $2.30 per $100 of assessed value.

The new classification on vehicles was created by the General Assembly to give localities the ability the lower the rate on qualifying vehicles. This comes as individuals are seeing the value of their vehicles rise dramatically.

Normally, the value of cars and trucks depreciates each year; however, the pandemic has changed that, Acting County Administrator Carol Steele said.

The inventory of used cars dropped during the pandemic because rental companies and individuals were unable to purchase new cars, while the availability of new cars was impacted by a shortage of computer chips. That, along with a number of other factors, such as disruptions of the supply chain, led the price of vehicles to skyrocket.

Steele said that, according to J.D. Power and Associates, the value of 95 percent of vehicles rose dramatically. Along with increasing car values, Gloucester residents are experiencing increasing prices at the gas station, grocery stores and in retail goods.

Gloucester’s Chief Financial Officer Cheryl Spivey said the new rate was a result of the board requesting the old rate be reduced as low as possible while still pulling in the expected revenue that the proposed budget showed. She said the old rate of $2.95 would have generated around $2 million more than the expected amount because of the dramatic increase in vehicle valuations.

Gloucester’s decision to lower the vehicle tax to $2.30 will keep county residents from experiencing the same level of inflation others are in the country, said Steele. She said the impact of the lower rate will vary from vehicle to vehicle and that some may pay a similar amount to what they paid before.

Steele noted that though the rate for the vehicle tax was lowered, it was not leveled. Residents of Gloucester will likely be paying more than they were before, but Steele said the increase is not massive and is considered inflationary. She said Gloucester always projects an increase in revenue gained from personal property due to normal inflationary causes.