Revenue Sharing Agreement Debated Again

The city and county are back to fighting about their decades-old revenue sharing deal, Rachana Dixit and Brandon Shulleeta wrote in the Progress on Sunday. (I’ve had no power, telephone line, or mobile phone service; now that I’m in a hotel, I’m catching up.) The more conservative members of the Board of Supervisors want to eliminate the deal, in which a chunk of the county’s taxes go to paying the city, in exchange for the city not annexing any of the county’s land. The BoS doesn’t want the city to expand (which would have a much greater impact on their coffers than revenue sharing), but they also don’t want to keep paying—they just want to back out of the contract while getting the best of both worlds, or at least renegotiate it on friendlier terms. City Council has no interest in such a change, although annexation would likely be of enormous financial benefit to the city.

The county’s taxation rate of real estate is 74.2¢ per $100 of assessed value, while the city’s is at 95¢, Councilor Satyendra Huja points out, so it’s not like the county is helpless to generate more revenue. The city also emphasizes that the payments—$18M this year—go to projects of regional benefit, such as the bus system, parks, county fire stations, affordable housing, and the recycling center.

18 thoughts on “Revenue Sharing Agreement Debated Again”

  1. Annexations have not been allowed in Virginia for over 20 years. The moratorium is set to expire soon, but I assume it will probably get extended.

  2. I know at least some of the folks who come and enjoy Fridays after Five and stroll the pedestrian mall in general live in the county. The city may benefit from the taxes on vendors and restaurants, but a community living room serves as more than just as a commercial site. It’s an amenity we all get to enjoy.

  3. Some Revenue Sharing facts people are rediscovering in 2010.

    Because state law treats cities and counties differently, only the city council – not city voters – had a say whether Charlottesville would enter the revenue sharing agreement.

    In the county, joining had to be approved by a vote of the Board of Supervisors plus a plebiscite by the citizens.

    After an education campaign broader in scope than anything seen here before or since, whose symbol was Charles Peale’s genial Annexation Monster, county voters approved it May 18, 1982 by 63%.

    How thorough was the education campaign? A private poll taken via telephone six months earlier showed an approval rate of only 20%.

    To get county people into a frame of mind to cooperate with the city, one radio ad reminded them, “The best time to plant a tree is 20 years ago. The second best time is now.”

    10 of the (then)15 county precincts approved the agreement, five did not. The approval vote was:

    Jack Jouett 79%
    Woodbrook 76%
    Ivy 74%
    Free Bridge 73%
    Monticello 59%
    Hollymead 59%
    Keswick 58%
    North Garden 56%
    Porters 55%
    Covesville 52%
    Stony Point 49%
    Free Union 46%
    Batesville 44%
    Scottsville 43%
    Crozet 41%

  4. I’d love to see City Council call the counties bluff and threaten reversion. It won’t happen, of course, but in many ways it makes the most sense. Instead of fighting all these stupid city/county issues we could just have one unified government. Why share services when you could just have one set of services to begin with? Of course the possibility of a Republican majority would vanish forever too…

    On the other side of the issue there are some serious problems with Revenue sharing. First of all it penalizes conservation efforts, causing the county to pay the city more than it actually gets in revenue from a significant number of properties. Also as the county has pointed out, when Albemarle’s wealth is calculated by the state that it doesn’t account for the money that goes to Charlottesville. Lastly, the county doesn’t get any say in how the city actually spends that money. I believe Dave when he says it all goes to joint projects and regional efforts, but there’s really no requirement for that to be the case.

    Planning for Albemarle has change dramatically since 1982. The way revenue sharing is done if goes against the zoning for the county. Essentially, it sets up a situation where it is in the Counties’ best interest to encourage developmoent of as much property as possible regardless of whether it actually makes sense to do so. That’s because each property that comes out of land use means less money lost by the county in the short term.

  5. As a city resident, I’m kind of enjoying all the gum-flapping that’s going on in the county on this issue, mostly by the Republicans on the Board of Supes. Why, if I didn’t know better, I’d think that Ken Boyd is running for Congress!

    However, I understand the county’s point in regards to how the overall revenue counts for the state’s school revenue sharing formula. As the parent of kids in the city schools, I’d prefer that the city get the money, but from a fairness perspective, it seems reasonable for the revenue sharing to count against the city’s resources. I also think that if the city school budget were to suddenly be cut by $3M, central office has plenty of low-hanging fruit to cut from the tree. I don’t see that ever happening, though!

  6. I also wonder if the County supes realize that the city owns the land for both major reservoirs. “Fine, keep the $18M; now go drill 40,000 water wells!”

  7. I also wonder if the County supes realize that the city owns the land for both major reservoirs. “Fine, keep the $18M; now go drill 40,000 water wells!”

    I think that raises a good point: the fate of the city and the county collaborate are intertwined so extensively that this sort of fighting ultimately works for nobody. It also highlights, at least from my perspective, the biggest benefit of reversion: it would force everybody to work together, rather than compete.

  8. Wait until the annexation moratorium expires and then Cville can annex the urban ring around the city.

    Say, north to the Greene border along Rt29, south to Biscuit Run, east a bit past Pantops, and west past Farmington.

    and no more revenue sharing.

    The city really should include the entire city.

  9. The city might as well annex the urban ring. They already rely on the services of the city (busses, parks and rec, etc).

  10. I’ll probably get into trouble for saying so, but I have far more confidence in the City’s ability to manage growth than I do in the planning (or lack thereof) in the county. I think the seperation of the two governments creates a situation (embodied by the meadowcreek parkway and 29 North), whereby the county often makes decisions about development that negatively affect the city. I think the County can then get by with telling the city “It’s your problem now, so fix it”. To be clear, it’s not for lack of a comprehensive plan or good planning staff, but more often just a lack of political will to actually follow that planning.

    Also, as a concrete example of this sort of thing, the City may own the reserviors but it’s county policy and lack of adeqequate sediment controls which has allowed them to silt up. In practical terms, we’ve allowed people to build developments right next to the reserviors on critical slope where the sediment would directly affect the water supply. How much were those dredging estimates again?

  11. I think it is important to make the following notes and connections.

    1. The Revenue sharing debate that Cville News links to comes AFTER another article about delegate Bell’s bill on local education funding.

    2. That article and the money the city would lose from that bill is what started the recent round of Revenue Sharing debate news articles (or at the least both articles and the current conflicts are closely linked).

    3. The education money the city stands to lose with the Delegate Bell bill (which has been said is an attempt to adjust or balance some of the Revenue Sharing inequities) is 2.6 million dollars.

    4. That dollar figure is notable because the City of Charlottesville had a 5.3 Million dollar budget Carry over from last year. And chose to give all city employees bonuses.

    Clearly the city has the money waste. So why are they complaining.

  12. To fdr: the revenue sharing agreement has no expiration date and is a binding contract.

    It doesn’t matter what our imperious legislature does regarding the state-wide annexation moratorium. So long as Albemarle pays up every year according to the formula spelled out in the agreement, Charlottesville by contractual agreement cannot bring annexation proceedings.

    Anyone know what the total in shared revenue is since 1983? It’s close to $150M.

    BTW, speaking of the taxing formula in the RS agreement, it’s responsible for higher taxes in the city. If the city were to reduce tax collections to the minimum needed to run the place, it would trigger a lower amount paid by the county. That’s dictated by the formula.

    So every year the city takes from us surplus taxes it doesn’t need so they can leverage more from the county. How galling to anyone in the county who grasps that.

    What’s galling to me in the city is their squandering this multi-million dollar annual surplus instead of setting it aside for economic downturns such as this one. No one in city management respects frugality. They find the idea insulting.

    We Dems have a revulsion against nominating for city council anyone opposed to spending every dime and then some. They’re all spenders. There’s no balance.

    Every election it’s another council of dedicated socialists, but that’s what Charlottesville voters want.

  13. Huja actually makes a good point though. The county does have the ability to cover the shortfall. For example, they had the opportunity to raise fees on applications for subdivision and development to recover thirty percent of the cost to the county, but they declined to do so. Why? I suspect because they want to use the economic situation as an excuse to remove the environmental ordinances passed by their Democratic colleagues (thus reducing the need for staff to review anything). It’s extremely dubious as to whether they can really save money this way.

    In fact, I suspect Slutzky is going to be vindicated by this whole situation. He was pilloried for suggesting a slightly higher tax rate, and questioning land use policy. It will be very interesting to see what Republicans are forced to do in order to balance the budget. My understanding is that Albemarle has one of the lowest tax rates in the state, especially when you take into account our population. I’m not saying I personally want more taxes, but at some point the public will have to decide whether they really want services like schools and libraries, and if so then they will need to pay for them somehow. That may force the question of why “Farmers” like Wendell Wood, aren’t paying their fair share. It may not be popular, or win elections, but that’s the other side of fiscal conservatism.

  14. As a County resident, I believe that we, as a County, have the right to exist without being forcibly annexed. We also have a moral right not to be forced to pay tribute to another entity in order to maintain our right to exist.

    This arrangement is immoral. Huja’s point about the county’s tax rate is irrelevant. You can always find some other entity somewhere that has higher or different taxes. That has nothing to do with the moral question of self-determination.

    We in the County live here for various reasons, including cost of living and tax rates. Huja is essentially saying “you should just be like we are.” Well, we don’t want to have a tax structure or budget just like the city’s. This strikes at the heart of the self-determination issue. The City of Charlottesville should have a right to exist and to become what it wishes to be, and so should the County of Albemarle.

  15. Jack, I’m not in disagreement with self determination part; however, to put it into perspective if the City were to revert to a town, then our taxes would indeed go up significantly (I wish I had the exact figures for how much). Besides, the only way that Revenue sharing will go away is if the city voluntarily changes the agreement. That’s pretty unlikely. So, while we can be outraged as much as we want, it really doesn’t have much to do with the counties’ budget situation.

    Instead of balancing the books by cutting services or raising taxes and fees, the Republicans have (successfully) diverted attention away from the real issues. To that degree I think Huja is right in the sense that the only real choices for Albemarle are to either fix the revenue situation or cut expenses.

    That said, there are some realistic changes that could be made to the revenue sharing agreement to make it more fair (and which both sides might agree upon.) However, I sincerely doubt any of those would make up for the revenue shortfall.

  16. The revenue sharing agreement was made under circumstances of extortion since the county only entered into the agreement under threat of annexation by the city. This is emphasized by the state legislature putting a moratorium on annexation shortly after this agreement was struck, so the statehouse clearly sees annexation as unfair. The fact that our revenue sharing is roughly 10 times what other cities and counties have, and in addition is permanant (again what no other cities and counties have), emphasizes the extortion under which this agreement was struck.

    Therefore, the revenue sharing agreement ain’t worth the paper it’s printed on, and the county should simply refuse to pay. The city would’nt stand a chance in VA courts, and the statehouse would not let the city annex regardless of what the agreement said.

  17. Alas for Bill, nothing in the legal definition of “Extortion” or the appellate history of annexation in Virginia supports his assertion. They negate it.

    One cannot ignore a legitimate signed agreement between parties merely because it was made to prevent a legal process. By that reasoning, a third to a half of all contracts ever made would be voidable.

    At some point down the road, the leaders of Virginia might decide we should cease being the only state in the nation that has independent cities with no charter or corporate ties to the counties around them.

    Then both Charlottesville and Albemarle might realize an advantage in re-drawing the RSA.

    But betting Virginia will alter any tradition voluntarily, whether or not it works, is not the smart bet.

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