Albemarle Facing Revenue Shortfall

The county is trying to figure out what to do in the face of declining revenues, Brandon Shulletta wrote in the Progress a few days ago, so they’re surveying citizens about whether we’re willing to pay more taxes for services. Though the numbers aren’t in yet, Albemarle anticipates a steep drop in income, what with declining property values, so either services have to be cut or taxes have to be raised. The state is facing the same shortfalls, which may well result in a cut of funding to localities, as happened in 2002. Ultimately, it’s up to the BoS to make the call on what to do, but survey results will help them figure out what the public wants.

51 thoughts on “Albemarle Facing Revenue Shortfall”

  1. It’s going to be a brutal budgetary year. I don’t envy the BoS, who presumably will have to ask for an increase in the mil rate on property taxes.

  2. This is all before the drop in sales tax hits when the new Wal-Mart and Loews- a long with everything else- opens in Greene county and cannibalizes Albemarle stores sales tax revenues.

  3. Yet another instance where the reliance on property (real estate) taxing has seriously drawbacks.

  4. There are alternatives other than cutting out services. Have they looked at extending their capital improvements program expenditures over a longer period or scaling back some items, or looked at large item procurement extensions, looked at lowering the county’s water and sewer bill by approving a cheaper alternative to the exorbitant 50-year water supply proposal?

  5. I believe that David “raise’em high” Slutsky is up for re-election. He’s never seen a tax rate rise he didn’t like.
    Actually thought taxes weren’t raised enough last time

  6. When I find that I don’t have enough money to cover my expenditures, I cut back on my expenditures.

  7. Watch out for the Albemarle Truth In Taxation town meeting nearest you! Numbers count greatly with politicians.

  8. What the Sam Hill did the Supes do with the massive windfall they received when housing prices were shooting *up*? And why is 30% more tax revenue than they had three years ago not enough?

    One big difference between governments and big oil companies: when the price of gas goes back down, the big oil companies don’t expect to go on making the same absurd profits they did when the price was wildly inflated.

  9. Cville Eye why should I watch out for the Truth in Taxation, are they bad people?

  10. Emor D. Nilap, no they are a group of citizens who analyzes parts of the county’s budget (unfortunately they do not have the number of volunteers necessary to do a comprehensive look)to inform others how the county is spending some of its money. Their stance is that the county does not necessarily have to cut out some services to reduce the budget, but rather spend the money more frugally. For example, they did not question whether the Hollymead fire station needed to be built, but did it have to have as many amenities that were included such as community meeting rooms and exercise rooms and expansive, luxurious lobbies. They collect a lot of information from the budget and pass that information on during their town meetings.

  11. I was mightily unimpressed by this bit from ATTA:

    The taxation alliance has been critical of Slutzky since the group formed in the winter of 2007. The group is on acampaign to encourage Albemarle County to spend money more efficiently. However, as to whether Albemarle has been fiscally inefficient in the past, Drake said: “I don’t know.” The county hasn’t done enough to answer that question, he said.

    (My emphasis.)

  12. That interview, Waldo, was filtered through a reporter who probably understands nothing about county spending. It left me wondering what else he said that didn’t get published. He, and others, can fill up a 1.5 hour meeting with visuals and discussion.

  13. Well I can say that Slutzky did attempt to review the land use taxation situation, but the people came out in droves to protest any meaningful reform. The county loses money on each person in Land Use, if only because it has to pay the city more than it gets in taxes.

    We’ve still not required one bit of evidence that anyone in the program is really even farming anything. So, we’ve protected our faux farmers at the expense of everyone else. That means wealthy land owners with 50 acres can get by paying less taxes than I do on five acres, merely for having a forest, or a field of grass that they mow.

    So, when you are worried about your higher taxes, think about that guy next to you with 500 acres biding his time to turn it all into a subdivision at your expense. That’s the guy you should blame.

  14. The land use issue that Lonnie raises is a good one.

    The reduction in taxes for keeping land in agricultural (or forestry, or open space) has been determined to be valuable to the community. Land use is NOT required by the state it is an option local communities have selected to participate in.

    One positive that came out of the land use debate earlier this year was for a program of revalidation. This concept (which was supported by the farming community) will ask for documentation of the use to continue reciving the benefit.

    The fact that Albemarle County must pay more to the City of Charlottesville due to the revenue sharing agreement was not an unintended consequence. I have been told by folks “in the discussions” that exepting land in land use was a concept that did not fly during the negotiations.

    The idea that cows don’t go to school is a simple enough economic theroy that I understand it. Further, I understand the angst some feel when a parcel comes out of land use and is developed. At that time the landowner must pay the “rollback” taxes on the parcel. The current rollback provision is 5 years (plus the current tax year). Therefore the locality has the ability to recapture 6 years of taxes on land that had very low services costs for those years (and many prior).

    One area for reform is the state provision that does not allow localities to discriminate between growth area parcels and rural parcels. This means parcels that exist in the development areas where the community has determined it wants growth to occur are being rewarded for retarding that growth. This seems ripe for reform in Richmond.

  15. The “cows don’t go to school” is bogus economics, but it is completely understandable that intellegent people who think that to be true.

    Okay, lets assume a parcel is developed right now, causing a need for a road which costs half a million dollars… If I put that land into land use instead for 30 years, and THEN I develop it, then the road will be build at 2038 prices. That means by stalling development, you actually cost tax payers more. So much more that you’d be better off without the tax break in the first place.

    The only exception to that is if you eliminate the development rights in the process, which is what the BOS tried to do. When it came down to it though, there wasn’t the political will to face off with the most wealthy residents of Albemarle county. Worse, it was made to sound as if it was poor farmers against urban residents. No mention was made of rural residents, like myself, that’d prefer not to see the countryside carved up or have our poorest residents subsidizing the richest ones. Most of the people receiving this benefit are not “poor farmers”, and most aren’t even farmers at all.

    The vast majority is under “forestry”, but not being farmed for timber. Now if we wanted to have some kind of program to encourage landowners to keep their property forested, then I might support that (as long as it applied equally to property owners of all sizes); however this program wasn’t intended for that. As a member of a family that does farm trees, I can tell you it is alot of work, and not simply letting trees grow and then coming back to cut them later. We should be verifing that everyone in this program under forestry actually has a forestry management plan, and follows it. That means they should be able to provide receipts for their expenses (thinning, replanting, etc.) My understanding from speaking to one BOS is that there is no political will to actually do this, and that all revalidation will do is confirm that they do indeed have a forest. I’d love to be proven wrong on that, but that’s my current understanding of the situation.

    You may be right that it may take Richmond to fix this program, but historically the Real Estate folks have been a really powerful lobby and have killed any kind of reform. If not, then as taxes increase the solution will eventually be unavoidable…


    Until then, county residents have made their own tax bed and now their going to have to pay in it.

  16. C-ville Eye,

    Yes, you are right. According to county documents, Land Use also includes public and private golf courses. (Ah, we wouldn’t want to deprive our counties “poor farmers” from playing golf at Keswick would we?)

  17. Perhaps I do not understand the economics of the situation.

    I do not believe the county will be responsible for building a road to service such a rural residence.

    But I am unclear, is it your suggestion that the postponment of development by 30 years (in your example) does not save the County money (schools, police, fire, etc.)?

    If the land use program delayed construction of 100 homes(WAG)in the rural areas, I would bet the differencial in reduced operating and capital expenditures would vastly outweigh the increased capital costs associated with such development.

  18. Neil,

    Think about Biscuit Run. If that property was developed back when it entered land use (1970’s?) then all the additional infrastructure (Schools, roads, water, etc.) would have been build in 1970 at 1970s prices. In addition, it probably would have been developed gradually over time, not all at once. As is, the current model encourages a situation where people hold on to land until the market is at the highest point and then it is all developed at once. That’s a planning nightmare, and it means that overnight the locality then has to provide for schools, roads, and all the other services necessary. Where roads are needed, there are now high value properties in the way which then have to be bought. Even worse, it has to do all that not at 1970s prices, but at 2008 prices.

    Look at the price tag to fix the water supply issue. There is a direct link between these developments once under land use, and which now necessitate the need to acquire more water. Look also at the original quotes for dredging and other measures. The price to make all those improvements has gone up exponentially since it was first investigated many years ago.

  19. I think both of you have many valid points about land use – it seems to me to be a poor way to accomplish things that might better be addressed other ways.

    What puzzles me is why I should care whether my neighbors are actively farming their land or letting it grow wild or lie fallow. What really concerns me about the forestland next door is not having the woods bulldozed to put in a strip mall, and I don’t see how the degree to which current owner is managing or exploiting the timber has much to do with that. Likewise with open land – I have a lovely pasture across the road from my front porch, and sure, a few horses or cows might add some rustic flavor to the landscape, but their absence doesn’t worry me unduly. If someone put a factory farm on it, THAT would concern me, but again, that’s a zoning issue.

    (I’m not saying the law shouldn’t be enforced, just questioning the rationale for it to exist in the first place.)

    As for “cows don’t go to school,” the main fallacy in that is that land development causes population growth rather than being driven by it. I’ve never seen any evidence that it does. You do see increased costs and headaches from transportaion, but the schools, reservoirs, landfills, and sewage treatment facilities are no less strained by apartment or town house dwellers than by house dwellers. Bringing in newcomers will increase those costs more than the new revenue will cover, but moving current local renters into houses won’t, because most of those costs were being incurred already and the tax revenue from fifty houses is much greater than that from an apartment building and twenty acres of agricultural land.

    Of course all the foregoing notwithstanding, I still haven’t seen any reason why an increase of tax revenues of 20-25% in five years is insufficient to cover county needs, even if it’s down from the 130% they were getting last year. My suspicion is that the reason is that the county is about as responsible with money it receives as any of the drunks on the Mall are.

  20. The city provides a significant number of home owners with a real estate tax rebate. One of the reasons is to allow these residents to remain in the city and not put a substantial number of properties on the market at once, probably trigtering a significant devaluing. I’m wondering what would happen if a large number of acres in the county were charged the full rate and I can’t help but believe that a large number of acres would be on the market, ripe for long-term investment purchases at a greatly deflated price. Of course, there would be great pressure later to develop those acres into subdivisions.
    I am glad that Mr. Williamson brought up the idea of differential taxation between the growth and non-growth areas. I can not understand how property in the Pantops area can be considered in a non-growth area while property around the 5th Street – I-64 interchange is in a growth area. Also, I think the property in the non-growth areas that is just fallow should be downzoned in order to continue to get the land use differential. Of course, I will be the first to say that I really don’t know what I’m talking about but wanted to throw it out there.

  21. Responding to a couple of bits in this thread (probably not all—there’s lots of good stuff herein … ).

    First, in the main introductory piece, we don’t agree that “ … either services have to be cut or taxes have to be raised.” Our group maintains that the same – or better – services can be provided at less cost. The original statement assumes that every penny of taxpayers’ money is already being spent optimally, and that every efficiently in government spending has been identified and implemented. It has not, of course, which brings me to my second point …

    To the Waldo Jacquith reply at 8/25/2008/1016, I’m not sure what he/she is unimpressed with. Did you want more detail, specifics, etc.? The following post by Cville Eye is correct: in that with mainstream print media, you seldom get the benefit of the full interview –they just don’t have the space. WJ just probably hasn’t been exposed to the media any more than from the retail / consumer side – those of us who work with the media can appreciate how tough a job it is to cram a huge story in limited column-inches.

    But to the point (“…as to whether Albemarle has been fiscally inefficient in the past, Drake said: “I don’t know.”) the Daily Progress write got it right: we simply don’t know. Witness:

    · Dennis Rooker (WINA, April 3, 2008) “… (we are) continuing to do a thorough look at the budget for efficiencies. I think that there will be momentum for the Board to do an efficiency study much like the Resource Utilization Study that schools just completed.”
    · David Slutzky indicated (WINA, April 7, 2008) that he would support the county doing a similar exercise as the School Board has done (i.e., perform a Resource Utilization Study).

    Both these quotes indicate that county government has not yet done the work to determine if it has been spending our money effectively, or whether there are fiscal inefficiencies that still exist. During the interview, I indicated I highly suspected there were, but until we do the hard work to find out, we won’t know.

    Dennis Rooker probably said it best in the 7/21/2008 Daily Progress, regarding whether the county’s so-called “green initiative” was worth the money: “My guess is that there is an initial investment and that it will ultimately save the county money.”

    His “guess?!” I don’t want my supervisors guessing about whether my money is being spent wisely – I want them to “know.” Yes, I realize Rooker may have said more during the interview that wasn’t printed, but if he actually knew the hard data about how much money our green initiative might save, don’t you think that would have been his comment?

  22. First, in the main introductory piece, we don’t agree that “ … either services have to be cut or taxes have to be raised.” Our group maintains that the same – or better – services can be provided at less cost.

    Well, no, I don’t imagine you would agree with me. Your tenure chairing the Albemarle County Republicans involved a great deal of telling people that it’s possible to both cut taxes and provide more services. Like many conservative Republicans, I’m of the mind that you’ve got to pay for what you get (out of government or anything else), and that anybody who promises that you can simultaneously lower taxes and maintain/increase services is either lying or trying to sell you something. It’s common sense: you can’t get something for nothing.

    with mainstream print media, you seldom get the benefit of the full interview –they just don’t have the space. WJ just probably hasn’t been exposed to the media any more than from the retail / consumer side – those of us who work with the media can appreciate how tough a job it is to cram a huge story in limited column-inches.

    Just to be clear, you’re saying that Brandon Shuletta has misquoted you here? Or that he’s misrepresented your position? Do you not, in fact, know that the county has been fiscally inefficient?

    Yes, I realize Rooker may have said more during the interview that wasn’t printed, but if he actually knew the hard data about how much money our green initiative might save, don’t you think that would have been his comment?

    And if you actually knew the hard data about how inefficient that the county has been, wouldn’t that have been your comment? Your logic cuts both ways.

  23. Is Albemarle Truth in Taxation advocating that the county conduct an efficiency study?

  24. I’m interested in ATTA’s position on Land Use, which now accounts for about 19 million dollars or 14% of our tax dollars (10 cents of the 71 cent per hundred dollars according to the County CPA). For the past three years I have contacted the county finance department and asked to see data showing a positive return on investment for the revenue loss due to land use. To date the county cannot produce any financial data to support the program.
    If the position in favor of land use is “cows don’t go to school”, then here again the data does not support land use as a mechanism to achieve rural protection. The county study done from 1995 to 2005 showed a loss of 16% of the land in land use, with the bulk going to development. Data from PEC done from 1988 to 2007 showed an average loss of over 3,000 acres. That said if the real goal is to save rural land then there is positive news. The ACE program has, since 2001, protected almost 6,000 acres for abut 8 million dollars and has received some additional money from the state giving the program more bang for the buck. The last time I looked ACE was preserving about 1,000 acres per 1 million spent. Put another way, the county has given over 140 million dollars in tax subsidies saving ZERO acres of land and just voted to continue to give million of dollars in tax subsidies per year only to lose 3,000 acres for every 1,000 acres saved under ACE. Losing rural land at a rate of 3 to 1 is not the way to save the rural area. I fully believe that saving rural land is not only positive from the perspective of saving the rural beauty of the county, but makes financial sense as well in the long run. I would much rather see the cost for Land Use and ACE put into one rural protection fund (this year 19 million for Land Use, 1 million for ACE). From this fund (20 million) we would then fully fund all those who are willing to participate in the ACE program (there have always been more people applying then money available to fund them). The remaining funds would be used for land use, albeit at a prorated amount. This would achieve two goals. 1. It would fund those who are actually interested in preserving the land and continuing to farm versus those just waiting around to cash in when the price is right. and 2. It would spread the cost for rural protection across all of the tax payers instead of the current system where one segment of the community pays the entire amount.
    At any rate it will be interesting to see ATTA’s position on this very important issue.

  25. CrozetResident,

    That’s a very good idea. I also had an interesting conversation with Slutzky recently in regards to the problem of small landowners who don’t qualify for most easements. He said there was enabling legislation that would allow Albemarle to be an easement holder for small properties. He said too, that he’d be willing to consider offering the land use tax break rates for small landowners under easement.

    So far, all programs have dealt with trying to keep large properties from subdividing, but there has been no incentive to recombine smaller parcels into larger ones. This would essentially create an incentive to do that. (i.e. if you bought an adjoining property, you could eliminate the rights by easement or sell them via TDR and write off most of the taxes.)

    I think this is the sort of thing even the Farm Bureau could be sold on. (Who could possibly be opposed to more options?) It would also take that easement money that we already know is a good investment and apply it more widely. Over time, this could be a good tool to control growth, help our budget by reducing infrastructure needs, and keep taxes lower.

  26. Aren’t there any people out there that agree with me to eliminate ALL tax backdoors, giveaways, loopholes and the whole encyclopedic sized mess? FLAT TAXES, federal, state, local.

    It’s transparent, it’s effective and it definitely is more efficient.

    You want/have 100 acres for your little kingdom? Great for you! But there’s NO F’en reason your land should not be taxed as much as her land over there next to the county dump. Can’t afford to keep it? Then join the crowd.

  27. Majunga, you’d still have to tax land based on its value, not its acreage (that would be like a tax based on hours worked rather than earnings – obviously unworkable), and the use of the land permitted by law will always have a huge effect on its market value. And you certainly wouldn’t want to do away with zoning and other land use provisions in order to make property taxation more even.

  28. Of course it would be based on land value, aka market valuation/price! I did not talk about zoning, eminent domain or development rights. The whole idea is to keep things simple, so it’s simple to figure out, and it’s simple to not let the cheaters cheat (aka the Wealthy and their hordes of lawyers, lobbyists and other highly paid whores).

  29. Still waiting to hear from ATTA and their position on land use. If taxes are really that important to them it would seem they will have to take a position on land use which accounts for 14% of our tax rate. If they do take a position I expect that position to be backed up with hard data from Albemarle County supporting that position. If they don’t take a position how can anyone take them seriously.

    And still we wait!

  30. Still no word from ATTA and this morning in The Daily Progress they take aim at excessive spending, where you say? Why the exercise room at the Hollymead fire station. I don’t think taking a shot at our firefighters, while not tackling the issue of land use is an acceptable review of tax policy in the County. If you read the article you get the distinct impression that a tax hike for county residents is in the offing. Even if ATTA can’t find the courage to discuss the land use issue, I don’t think the board is going to have that luxury and will have to defend, this time with data, why land use should continue.
    Maybe we should do like they do on The Shilling Show and start a “where in the world is ATTA on Land Use” watch.

  31. Perhaps ATTA knows its a complex issue and have not come up with a position. It may be a good idea for you, crozet resident, to attend one of their town meetings and ask them. It’s been held as an open forum in the past. One thing that I’m certain about. The county will never change land use taxation in order to lighten the current tax burden on those property owners who are not benefiting from it, so don’t expect a windfall soon. Then, too, they may disagree with your stance.

  32. Cville Eye,
    I believe that judging from the size of the crowds that show up at the County office at budget time, both for and against, indicates the attention residents of the County put on the subject. But when the best you get from ATTA on the specifics of tax policy is “I don’t know” and silence on land use tax policy, I don’t see how they can be a creditable force on the issue.
    As for my stance on rural preservation I would welcome ATTA’s opinion on both the overall subject of spending tax dollars on maintaining the rural character of the County and on my view that money spent on rural preservation is well spent, but land use is not the appropriate vehicle to achieve it.
    And still we wait.

  33. CrozetResident, while we’re waiting, would you like to enlighten the rest of us as to your views on increasing county staff, increasing county-owned real estate, increasing the sales tax, increasing county fees, increasing water and sewer charges, and using local money to improve federal highways such as US-29? I haven’t heard ATTA specifically discuss these issues either. The solution to the county’s fiscal woes certainly doesn’t lie totally in the land use issue, although I’m beginning to wonder if you agree to that.
    I would like to declare also that I’m not a government employee, at any level of any jurisdiction.

  34. Cville Eye,
    You raise a number of valid concerns that should be addressed. I do have concerns about using local money to pay for highways, which would appear to be a very slippery slope to go down. One has to ask why should local residents have to take over a state mandated responsibility. Actually bring up sewer and water fee’s is probably a good example of what happens when the process gets taken outside the ability of the citizens to make changes. Would the same thing happen if we authorize a Transportation Board with taxing authority? With regard to the County staff, services, it would seem there should be a valid way to audit government by a third party.
    Hope that helps.

  35. CrozetResident, it certainly does.
    “Would the same thing happen if we authorize a Transportation Board with taxing authority? ” Yes, that’s one the major problem of having authorities making decisions for all in a democracy. They do not answer directly to the people that they govern. Most authorities, like airports, have the power to issue bonds for capital projects and service the bond issue through future revenues and fees passed on to their users; for transportation bodies to have the additional power to tax a large number of people is stretching it.
    “With regard to the County staff, services, it would seem there should be a valid way to audit government by a third party.” I think that’s the purpose of the study that the BoS has approved. It is a method that I think should be used on a limited basis. However, I think “the people” should serve that third party function. All too often the citizens delegate their democratic responsibilities to officials and now our officials are delegating their responsibilities to authorities.
    I am curious. What would be the ramifications of extending a flat tax rate over all county property that is not under ACS? There must be pros and cons.

  36. As for a flat tax rate I think it would be inconsistent for me to say that I want to insure money matters are in the hands of elected officials and then use a flat tax to remove their ability to exercise their judgment when budget time comes. Remember giving officials the ability to adjust taxes means they can lower as well as elevate the rate.

    I see that ATTA is still AWOL. I’m sure they’re hoping Waldo will remove this posting soon. Maybe Waldo should add a new posting titled “Drake Ducks On Land Use”.

  37. I don’t think my use of “flat rate” is clear. I mean, as a example, that if the county’s rate if $.72/$110 then everybody pays it. Those who have farms would pay $.25/$100.

  38. In order to answer your question, you’ll have to give me your definition of a “farm”. If a farm is a plot of land used for agricultural purposes and contains no division rights, then I would support such a proposition. If a farm is a future development where the current residents happen to be cows, then no. The difference is the first belongs to a farmer and the latter belongs to a land speculator.

  39. Whereas almost 2000 people attended the IMPACT
    rally earlier this year to demand that Alb. County increase
    spending on low-income housing and health care. Why is
    the County paying more heed to 60 ATTA’ers vs.
    2000 IMPACT’ers ? ? ?

  40. I’ll guess the 2,000 were not county residents? I found that group quite interesting. Since when do Christians ask the government to do their good works? Render unto…
    St. Peter: And where is your list of good works, my son?
    Dead and trying to get into heaven: I don’t need a list – I got the government to do it! Since the government can force people to give them enough money to do whatever it wants, I took the smart and easy road – that way more people were able to receive charity.
    St. Peter: That’s not called charity, that’s called welfare. Next.

  41. Oh that’s right, I forgot, Christians are not taxpaying
    citizens and aren’t allowed to voice their opinions as
    to how their tax dollars should be spent. My bad.

  42. That’s right, not if they are tying religion to those dollars. They didn’t come as tax paying citizens, they came as Christians and tried to coerce the politicians to do their bidding because it was the Christian thing to do. That’s why they introduced themselves by their church’s name (and one temple, I think). Next thing you know, they will be asking for tax money to fix their church’s roof or pave the parking lot. Then to buy their bibles. Individuals who happen to be Christians can ask for what they want. Groups who are Christians should not want to. They should thrill in helping their fellow man with their own resources. If they see a man that needs food, feed him. If they see a woman in need of spirtual guidance, feed her. If your neighbor has no shelter, open up your home. It really is quite simple if one takes the time to think about it. Charity was always about individuals loving individuals. Welfare is always about groups providing handouts to groups. It keeps it impersonal that way. It’s really a shame that the ministers do not understand that.

  43. That’s just silly. And reveals a total ignorance about
    the way government works. People have a right to say
    how their tax dollars are spent. Period. ATTA has that
    right and IMPACT has that right. ATTA had 60 people at
    their forum and IMPACT had 2000. Just because you personally don’t
    agree with IMPACT’s priorities and you do agree with
    ATTA’s doesn’t mean the one is any more or any less
    legitimate than the other. You are in the minority any more.
    The County is going blue and you and your fellow travelers Drake
    and Schilling just have to get used to it.

  44. I never said that I agreed with ATTA, I just said they were having a public forum and encouraged people who are concern about taxes to attend. Does the county going blue mean that the county is filling up with welfare mongers? I am aware that churches who get involved in politics may find their tax-exempt status changed.

  45. And if the churches do not understand scripture any better then what that group displays, they should pay the taxes that they are telling the government how to spend.

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