For the first time since 1999, Elkin property and motor vehicle taxes will probably increase.

During the Town of Elkin budget meeting on Tuesday, commissioners voted to raise taxes two and a half cents from $0.475 to $0.50 per $100 of property value. The budget will be voted on for final approval during the Board of Commissioners’ meeting on June 11. The vote was 4-1, with J.L. Lowe opposing it.

“It really came out of nowhere,” said town Manager Lloyd Payne. “But I think it will benefit the town. We are going to lose revenue with the drop in tax evaluation on people’s property, and this will allow us to recover from that.”

The tax raise will bring about $97,000 in with property taxes and just under $6,000 with motor vehicle taxes, Payne said.

“The taxes haven’t been raised since 1999. That’s a long time to continue operating at the same level or increasing services at the same tax rate,” Payne said. “The town is at the breaking point of do we continue to take money out of the general fund or go ahead and start raising taxes and water and try to recuperate the money we’ve pulled out.”

Property values dropped 7 percent overall last year after the Surry County reevaluation, according to Mayor Lestine Hutchens.

Along with the increase in taxes, the minimum water rate has been raised from $10 to $14. The volume rate has been raised from $3.50 to $5.50. A minimum water user can use zero to 2,000 gallons of water and pay $14. A user will be an additional $5.50 for each additional 1,000 gallons over 2,000 gallons, Payne said.

In the early 2000s, the water rates were $14 and lowered to $10,Hutchens said. About $200,000 per year has been taken from the fund balance to augment the water fund, Hutchens wrote in a column that ran in The Tribune last week.

Water rates are being raised to help pay for the operations of the water plant, Payne said.

“Our water plant can produce 3 million gallons a day. Fifteen or 20 years ago when Chatham and the Bassett furniture factory were around, they used a lot of water and we had a steadier flow of income coming in,” he said. “Right now we use 600,000 gallons a day when we used to use more than double that. With the factories dropping off, we still have to pay those operating costs. We have to raise the water costs and stop taking money out of the general fund to balance the revenue.”

The town is in the process of applying for grants to help pay for water costs but currently are not eligible due to Elkin’s low water rates.

The increased taxes and water rates would come into effect on July 1, 2012.

“This year will make a big impact for a lot of people. I will be paying the rates just like everyone else,” Payne said. “The first gallon of water produced is the most expensive, and everything after that becomes cheaper. It makes it very tough, but water revenue isn’t coming in anymore, people are consuming less water and the operating cost is continuing to rise.”

Reach Jesssica Pickens at 835-1513 or jpickens@heartlandpublications.com