Archive for the 'Taxes' Category

Western Bypass Bids a Rorschach Test

Published by Waldo Jaquith on May 11, 2012 in Government, Taxes and Transportation. 7 Comments Tags: .

The construction bids are in for the Western Bypass, Sean Tubbs writes for Charlottesville Tomorrow, but it’s not yet clear whether they’re good news, or bad. Seven bids were submitted, ranging from $136M to $214M, all of which exceed the $125.6M budget. A Virginia Department of Transportation spokesman says that they’re all within the entire $139M design-build budget, but Tubbs points out that pretends that none of that additional $13.4M engineering budget has been spent when, in fact, $9.3M of it had already been spent as of June 17 of last year. That seems to make it pretty clear that all of these bids are beyond the state’s financial means, unless VDOT chooses to allocate additional funding to the project.

The Commonwealth Transportation Board is scheduled to name the winning bidder of the design-build contract on June 20, which is also when the public will be able to see the design that was submitted.

Fluvanna Debating a 20% Tax Increase

Published by Waldo Jaquith on April 8, 2012 in Government, Politics and Taxes. 11 Comments Tags: .

Fluvanna’s got an interesting tax situation, Bryan McKenzie wrote in yesterday’s Daily Progress. The county’s Board of Supervisors has long been dominated by conservatives, and has steadily lowered taxes relative to expenses as election after election has put in office people who promise to lower taxes. As a result, the county has put off some financial problems for years now, leaving them in a terrible financial situation, without enough money to pay their basic expenses. Now some surprising people are supporting a 20% tax increase. Fluvanna residents pay a property tax of 57¢ per $100 of assessed value (they most recently assessed properties in 2006), which isn’t enough to maintain basic services, make payments on their debts, repair buildings, etc. County staff recommends a rate increase to 75¢ (a 31% increase) to maintain service levels, but a budget committee cut those down to a level that requires a rate of 68¢.

Perhaps the most vocal supporter of this tax increase is the chairman of the Board of Supervisors, Shaun Kenney, who is as conservative a Republican as you’re liable to find. (Disclaimer: He’s an old friend of mine.) Kenney is advocating what he regards as the real fiscally conservative solution: getting the county’s financial house in order, rather than going into further debt and leaving the problem for some future Board of Supervisors to deal with. A specific problem that he cites is that the county has a $0 budget for capital improvements, meaning that even basic maintenance to schools or replacing old fire trucks requires a tax increase to fund, something that anti-tax groups have successfully fought for years. If the tax rate remains level, Kenney says, Fluvanna will be forced to more than double the rate in four years, to $1.22, to meet their core obligations. Kenney’s zest for tackling this problem has the county’s farthest-right Republicans upset (folks who should be Kenney’s base), notably the Fluvanna Taxpayers Association, a four-year-old organization that opposes any tax increase to fund fixing schools or paying debts.

The Fluvanna Board of Supervisors is holding a hearing about this on Wednesday, which is sure to be lively. This is a showdown worth keeping an eye on, because it’s a perfect encapsulation of a rift in the Republican Party on both a state and a national level, one that divides people who oppose all taxes on principle, regardless of the consequences (e.g., the Tea Party), from those who support fiscally conservative policies (which may include raising taxes, as necessary). Consider the Fluvanna dispute a preview of what’s to come on a larger scale over the next year or two.

Albemarle Sets 76.2¢ Real Estate Tax Rate

Published by Waldo Jaquith on April 4, 2012 in Government and Taxes. 2 Comments Tags: , , .

The Albemarle County Board of Supervisors has voted on a 2¢ real estate tax increase, Carter Johnson reports for CBS-19, settling on the advertised rate of 76.2¢ per $100 of assessed value. The idea is to retain current revenues in real dollars, which requires an increased rate to offset decreased property values. It was a 5–1 vote, with Rivanna Supervisor Ken Boyd voting against it, saying that “we should give more back to the citizens.”

That 76.2¢ rate makes possible the construction of the Crozet Library, many years after it should have been built, and the board accepted a $5.8M bid from a Roanoke construction firm to do so. Construction starts in July. The board also voted against providing funding for increased rent costs for the Northside branch, Aaron Richardson writes for the Progress, despite that it was the county who negotiated that rent increase with the landlord. That leaves Jefferson-Madison Regional Library to figure out where to come up with $15,000 to make up the difference.

County Police Can’t Pay Enough to Attract Employees

Published by Waldo Jaquith on March 11, 2012 in Government and Taxes. 2 Comments Tags: , .

It turns out that the combination of low pay and high standards doesn’t make the Albemarle County Police Department an attractive employer, Megan Davis writes in the Daily Progress. They’ve had a hiring freeze in place for a few years, their starting pay is 13% considerably below market, and they recently increased their hiring standards, which probably explains why they’ve got less than 120 officers, when they need 150 to meet the county standard of 1.5 officers per 1,000 residents. The county has increased the starting salary by 7%—about half of what’s necessary to meet the market rate—but the Board of Supervisors doesn’t want to lower hiring standards, and it’s fairly unlikely that they’ll provide the funding to improve pay for both new and existing officers.

City’s Assessment Numbers are Fudged

Published by Waldo Jaquith on March 4, 2012 in Development, Government and Taxes. 29 Comments Tags: .

According to some research by Samantha Masone for The Hook, Charlottesville is cherry-picking the data on which they base real estate assessment values. The city recently reported that taxable property assessments are down by just 1.22% for the year (PDF). In calculating that number, city assessor Roosevelt Barbour, Jr. rightly excludes all “invalid” transactions—that is, all transfers of property that are not based on market forces, such as a parent selling a house to a child. Also excluded? Foreclosures and short sales. By Jim Duncan’s math, such sales make up 20% of those in the area and, perhaps not coincidentally, those distressed properties almost inherently go for very low rates. Masone took a random sample of houses to see whether they made the cut for calculating the city’s 1.22% decline, and found that twice as many transactions represented a decrease in value as the inverse, but only a quarter of those at-a-loss transactions were counted as valid by Barbour’s office. This might help to explain the gap between the claimed 1.22% decline and the decline of 32.1% measured by Nest, the local real estate agency.

Whether this is a common practice (and whether it is legal or ethical) is a question that is not explored by Masone, and is worth considering. I’m unclear on whether this has any immediate effect on individuals’ real estate taxes. While assessments of individual properties don’t appear to be impacted by this practice, the information that is presented to City Council to determine whether the tax rate should be adjusted is quite a bit rosier than reality—a difference of 31 percentage points could well be the difference between a rate cut and holding the current rate steady. And that, of course, affects all city property owners.

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