Monthly Archives: November, 2012

A Tax By Any Other Name

FORUM WATCH EDITORIAL

By. Neil Williamson, President

rose“What’s in a name? That which we call a rose
By any other name would smell as sweet;” – William Shakespeare

Words matter that’s why it is refreshing that as State Senator John Watkins has been discussing his transportation funding solution he has used the term “Gas Tax” rather than the more trendy “user fee”.gas tax 2

By contrast Charlottesville, if you haven’t heard yet, the bottom line on your property tax bill is increasing but don’t call it a tax. 

No, your property tax bill will be the mechanism the city uses to collect the soon to be passed stormwater user fee.   

Who will pay the fee?  Property owners based on their percentage of impervious surface.  The city has already used aerial images to calculate your property’s impervious surface. Impervious surface includes rooftops, driveways, paved patios etc.

But wait, doesn’t rain fall on everybody?

Charlottesville WRPPThe goals of the Water Resources Protection Program include “bringing the community together to help protect and improve the city’s valuable natural and man-made resources by protecting public health and safety…”  Aren’t these community goals that should be supported by the entire community?

While some of the costs of the new program can be blamed on the city’s existing, aging  stormwater infrastructure.  The majority of the cost is associated with new TMDL (Total Maximum Daily Load) storm water requirements that are a part of the Environmental Protection Agency (EPA) Chesapeake Bay initiative.   

Back in the old days, when a locality (or State) identified a need in the community and a government solution to that need, the community would fund that solution through its normal revenue stream.

Instead, the city is utilizing enabling legislation to establish a stormwater utility (expect Albemarle County and others to follow) to create a dedicated million dollar a year revenue source for stormwater management.

The city sees significant benefits to the user fee approach —

Providing funding through user fees has many advantages. Charging a fee is fair and equitable since it is based on a property’s contribution to the problem (runoff from impervious surfaces), not simply on assessed value, and includes all properties (including tax-exempt ones). A stormwater utility also ensures that collected user fees are wholly dedicated to funding the WRPP components. Finally, a fee also provides a consistent and stable funding source to ensure that the WRPP is both environmentally and economically sustainable.

It is important to note that the city has been proactive in reaching out to large commercial centers as well as churches (often with large parking lots) to inform them of the fee structure as well as discuss potential mitigation the owners can do on site to reduce their stormwater impacts and their “user fee”.

The Free Enterprise Forum is torn on the user fee concept.  While we tend to like paying for specific services rendered, we see the benefit being provided to larger than just those carrying the cost burden.

One business owner indicated his company owned  several apartment buildings mainly filled with University of Virginia students.  Using the user fee methodology, as schools make up about 60% of the  budget and that his properties do not significantly add to Charlottesville’s K-12 education population, shouldn’t he get a credit on his property taxes?  Of course not, education is a community goal that benefits all – well educated graduates may become future employees (or tenants) for his company. 

Taken to its logical conclusion, couldn’t the same argument be made for the gas tax and the stormwater utility fee.  In the former, an effective and efficient transportation system encourages economic development and improves the quality of life of all citizens regardless of their need for gasoline.  In the latter, environmental improvements included in the WRPP clearly benefit all of the community not just those who own impervious surfaces.

Words matter.  To paraphrase William Shakespeare “A tax by any other name will hurt as much”

Respectfully Submitted

Neil Williamson, President

20070731williamson

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Should Charlottesville Survey Seek Citizen Input?

By. Neil Williamson, President

Once again the Charlottesville City Council has issued their annual tax survey asking residents how they should prioritize their spending decisions for the upcoming budget cycle. 

Annually, this survey gives the Free Enterprise Forum post Thanksgiving heartburn.  As we suggested regarding the Thomas Jefferson Planning District Commission (TJPDC) survey, any such instrument is only as valuable as the respective cohort who responds.  Unlike the TJPDC survey, it does go out to all city residents (via utility billing).  It is understood that all who receive the instrument will not fill it out and those who do fill it out could also fill it out online and fax in an additional response.

To be clear, the Free Enterprise Forum firmly endorses the city’s vision for citizen involvement:

our decisions are informed at every stage by effective communication and active citizen involvement. Citizens feel listened to and are easily able to find an appropriate forum to respectfully express their concerns.

But, we also believe such surveys provide an “easy way out” for councilors who are simply looking to determine which way the wind is blowing.  Just as elections should be about choices of different perspectives (which Charlottesville has lacked for some time), budgets should also be about informed choices and decisions.

Understanding that these decisions have consequences, we are appreciative of the concept behind the last three survey questions:

13. You support City services through a portion of real estate, personal property, sales and other taxes and user fees. Considering all of our City services on the one hand, and taxes on the other, which of the following statements is closest to your view?

  • I believe we should decrease taxes and services (if chosen, go to Q14)
  • I want to keep taxes and services where they are
  • I believe we should increase taxes and services (if chosen, go to Q15)

14. If you feel services should be decreased, which services should be decreased?

15. If you feel services should be increased, which services should be increased?

The Free Enterprise Forum is appreciative of being asked to voice our opinion but this is not a true democracy.  As a republic, we elect folks to make these decisions, if we do not like the decisions they make, we have the opportunity to remove them. 

So should Charlottesville citizens fill out the survey?  The short answer is Yes. 

The longer answer is the same as we gave for the TJPDC survey:

So now the Free Enterprise Forum finds itself between a philosophical rock and a hard place; do we encourage participation in a survey that has flawed methodology or sit on the sidelines Monday morning quarterbacking?

After significant thought time, we are encouraging everyone to fill out the survey.

After City staff tabulates the responses, we challenge the City Council to accept the inherently flawed survey data as one of the many pieces of information to be used to evaluate the FY2014 budget.

That’s the reason City  Council was elected, to make decisions, not conduct surveys.

Respectfully Submitted

Neil Williamson, President

20070731williamson

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Greene BOS and School Board Talking Tax Increase vs. Cutting Services

By. Brent Wilson, Greene County Field Officer

Virginia law dictates that localities’ Board of Supervisors (or City/Town Council) have taxing authority and provide a financial allocation to the school division, but they do not have line item control of the school budget, that power is delineated to the School Board. In every locality, this creates dynamic tension between those who have the responsibility for generating revenue through taxation and those whose responsibility is educating the children.

Last week, what started with a request from Greene County School Board Chair Michelle Flynn  to the Supervisors requesting the same funding in FY2014 as FY2013 quickly turned into a request for a presentation at a mid-January public meeting a list of potential cuts for public feedback to prioritize approximately $1.2 million of spending reductions.

Flynn started the meeting with two key questions. First, can the Board of Supervisors  provide the same funding level as this year and the schools will cover any reductions in state and federal funding with cost reductions? Chairman Buggs Peyton (Standardsville) comment was that the county is facing a 6% decline in personal property tax due to reassessment of property values. Flynn’s second request was, would the BOS cover the 1% increase in VRS cost

This lead into a discussion of the Early Retirement Incentive Program (ERIP) which currently has 19 participants.   Peyton agreed with using teachers but not unskilled positions such as secretaries and custodians. He also indicated that bus drivers that require special training should be included. Flynn contended that custodians are hard to find and should be included in ERIP.

Peyton shifted the conversation to the $16 million reserve fund that has since been committed to various projects and that the county is looking at a tax increase since the assessment is down. Supervisor Jim Frydl (Midway) estimated that due to the reduced assessments, a shortfall of approximately $1 million would occur if the personal property tax rate stayed the same.

Peyton stated that he is serving his 11th year on the BOS and his priorities for the county, that some may find hard to believe, are education, fire and police.

School Board Member Roddie Kibler (Monroe) asked how do both boards act proactively to address the $1.4 million funding needed?

Greene County Schools Superintendent David Jeck said that one issue he does not want to impact is increasing the student vs. teacher ratio. With so many mandated programs, there is very little that can be cut – athletics, transportation (which is not a school requirement) and the vocational education program are all possible reductions. Jeck suggested surveying parents to ask what they would recommend cutting to come up with the reduced spending.  Flynn agreed that historically until there is discussion of cutting programs, there is very little public input.

After the first School Board Public Input Session, Jeck told NBC29:

“If there are certain things that they want to see kept in the budget and if there are certain things that they want to see protected going into next year, then it’s really important that they come out and share that with the school board.  The school board needs to hear that, and our school board is very responsive to folks who come out and speak.”

Frydl suggested a joint meeting between the Board of Supervisors and the School Board in January, 2013 to discuss options to cut education funding. School Board Member Troy Harlow (At-Large) assured that if the schools don’t receive the same funding then cuts will have to be made.

Frydl suggested that there is a small window between when the state budget is set in December to when the county budget has to be set in the spring. One of Frydl’s final comments was that either funds will be cut or taxes will have to be raised.

Despite Frydl’s suggestion that the State budget being “set” in December, nothing is done until at least early and often late Spring.  As an example, in May of this year the Greene BOS was adjusting their budget based on the State’s final numbers.  The Free Enterprise Forum Blog reported:

In last night’s (5/2) hastily arranged budget work session, the Greene County Board of Supervisors tentatively agreed to increase funding for the schools by $1.1 million dollars in Fiscal Year 2013.  This was approximately 1 million dollars less than was requested by the School Board.

This let to a most contentious public meeting six days later where we asked if the meeting was a Public Meeting or Pep Rally?

School funding makes up the lion’s share of every locality’s budget.  As we are seeing in all of the localities we cover (especially Fluvanna), greater communication between the school boards and the Board of Supervisors is a positive but will not eliminate the dynamic tension that is designed by state code.

The Free Enterprise Forum does not have specific opinions about any tax rate or spending plan; instead the  Free Enterprise Forum encourages the citizens of Greene County to become educated about the options and express their preference at the public hearing in January, 2013.

There are no easy answers, but it is far better for citizens to become educated and involved during the process rather than enraged at the outcome.

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Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.

The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at www.freeenterpriseforum.org

Greene BOS Gets Reassessment Update

By. Brent Wilson, Greene County Field Officer

The biannual reassessment of property values in Greene County  is now well underway.  At the November 13th Board of Supervisors meeting, Fred Pearson from the Reassessment Office  and Larry Snow, Commissioner of Revenue,  updated the BOS with the process to date. The field work to assess the values for market conditions and changes/additions to property has been completed and the notices have been mailed to property owners. A Comprehensive Sales Data Report that contains sales from each district within the county has been prepared .

Property owners can make an appointment to appeal the reassessment of their property on November 26, 27, 29 or 30. The gross data shows a reduction in value of 6% but that includes land in easement that has declined 15% and is not taxed. The new reassessment value calculates to 99% of market value – well above the 95% minimum required by law.

Supervisor Jim Frydl got confirmation that the 99% was calculated comparing the sales price for those that have transacted recently vs. the reassessed value. Also, the 6% decline will then have excluded the property in land use, resulting a smaller reduction than the 6%.

Snow indicated that the final impact won’t be known until the meetings with the property owners and the hearings with the Board of Equalization running from January to March, 2013. Specific reassessments can vary dramatically, two specific reassessments showed a reduction of less than 1% and another a reduction of more than 10%, but in different locations of the county. There are over 10,000 parcels in Greene County that are reassessed  .

BOS Chairmain Buggs Peyton commented that a decline of $.01/$100 equaled $188,000 in tax revenue. Snow indicated that a decline of 10% would have the equivalent impact of a reduction of about $.07/$100 ($.69/$100 x 10%)  but he didn’t believe that the reassessment would be that drastic.

So, what does this process mean and what is the impact on the county and the homeowner?

Is a lower value good or bad for the homeowner?

A lower assessed value means, all else being equal, that the homeowner will owe less property tax. But, of course, the new assessment is one indicator that the homeowners investment in their home is worth less than the prior assessment. The impact to the county for a lower value, all else being equal, means less tax revenue.

Assuming that the property values decline 5%, that would have the impact of reducing the property tax from $12,972,000 down to about $12,323,000 a reduction of $647,000 in property tax revenue.

So, where will Greene County recoup the nearly 2/3 million dollars in property tax revenue?

The FY 2013 budget for Greene County  isn’t being reduced nor has the cost of operating the county declined by 5%. The process is to have the tax rate increase to offset the decline in the assessed value of the property, the new rate being called an equalization rate.

But isn’t this an increase?

Yes and no.

It is an increase in the rate of tax. But it doesn’t increase the amount of tax being paid. The value of property has been selected to allocate a major cost of operating the county to the residents of the county. If the value of the property declines, then the rate of tax must increase if the locality is to receive the same amount of tax revenue to operate the county.

The Free Enterprise Forum supports the objective and regular regular reassessment of property.  Based on our experience, the appeal process has seemed far and equitable.  A failure of a locality to regularly reassess property can result in larger swings in valuation. While we do not have a position on any tax rate, it is important all involved understand an increased “equalized” rate in a downward assessment retains the actual dollar figure of the previous tax year.

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Brent Wilson is the Greene County Field Officer for the Free Enterprise Forum a privately funded public policy organization.

The Free Enterprise Forum Field Officer program is funded by a generous grant from the Charlottesville Area Association of REALTORS® (CAAR) and by readers like you.  To support this important work please donate online at www.freeenterpriseforum.org

Comments on Albemarle County’s Rural Areas Rewrite of the Comprehensive Plan

October 30, 2012

Sunset at Pippen Hill Vineyards - North GardenThe Free Enterprise Forum appreciates the efforts of Albemarle County staff in the rewrite of the rural areas chapter but there is a consistent tension in the document between rural area residential uses and rural area agricultural uses.   On page twelve, the chapter identifies the 1994 recommendations of farm operator that state “County Policies that support farmers regarding nuisance conflicts generated by residential uses in the Rural Areas” later on that same page it discusses ancillary “non-agricultural” to use the comp plan term “can have physical and nuisance impacts on surrounding rural land.”  I am confused which is the nuisance the agricultural use or the residential use.

The Free Enterprise Forum requests that landowner rights be included in those items the plan seeks to protect on Page 7.  It is important to recognize the rural areas are in their current state not because of government action but because of landowner stewardship.  We suggest the words inserting after protect “land owner rights and” the key elements that give the area its character.

The chart for residential uses on page 2 in the rural area is accurate, but misleading.  The rural area units do not compete with the condos and apartments.  A more accurate chart would compare Single Family Detached housing in the rural area vs Single Family Detached in the development area.

Under Conservation easements the Comp Plan notes 18.6 percent of the county is now under conservation easement.  What is the goal? 

If ¼ of the County’s land mass was tied up in perpetuity would that be enough? 

Is Albemarle County spending on such easements a proper metric for success? 

The chapter cites 70 farms in Albemarle County that sell local products to local consumers (Page 4).  I anticipate this number was taken from the Piedmont Environmental Council’s  Eat Local Campaign (Which is a great program).  Later in the document (and on the county’s website) the plan cites 26 wineries (there are 2 that I know of not yet listed) I believe this metric needs to be checked as only 7 Albemarle wineries are included in PEC’s list.  I suggest coordinating with Albemarle County Farm Bureau on this issue.

 We have spoken to staff regarding the objectives on Page 19 as being too broad.  Any new use, beyond a hayfield, would generate more demand on police and fire, will change the character of the area, and based on our understanding of the fractured aquifers and Virginia water law the concept of drawing groundwater from others should be removed.

Considering the fastest growing form of agriculture is farm wineries, we were surprised to see the assertion on page 20 “This situation is complicated by the tendency of winery events (which often include weddings and other gatherings to use their rural surroundings as an attraction without significantly supporting or promoting agricultural production”.  Nothing could be further from reality, as countless winegrowers have testified weddings and events generate new customers, sales and provide economic support for the agricultural uses.   These types of events were deemed as “usual and customary” by the General Assembly in HB 463. We ask this offending language be removed.

 We ask for a minor modification on Page 21 where the comp plan states Additional measures are needed to resolve issues, such as requiring a sound management plan.  We suggest changing to read “Additional measures need to be evaluated …”

 On Page 23, we ask you to drop 3b — the limitation of one or two special use permit events is too limiting.  Each special use permit should be considered on its own merit and conditions.

 We ask you reconsider the groundwater language in strategy 4b

 In Objective 5 we don’t understand why you are expanding some recreational activities while limiting others.  As the County is 95% rural areas we wonder why you would preclude a swim or tennis club in the rural areas to serve those residents as a special use permit.

Again we appreciate staff’s work on this document and hope you bring forward a comprehensive plan chapter that respects landowner rights and preserves rural enterprise economic sustainability.

Respectfully Submitted

Neil Williamson, President

20070731williamson

Neil Williamson is the President of The Free Enterprise Forum, a privately funded public policy organization covering the City of Charlottesville as well as Albemarle, Greene, Fluvanna, Louisa and  Nelson County.

Comments on Albemarle County’s Natural Resources Chapter Draft

October 30, 2012

The Free Enterprise Forum believes Albemarle County’s Natural Resources chapter needs to refocus on natural resources and move away from the pull of biodiversity. While one school of biodiversity seeks to maintain and restore habitat to maintain the status quo another school suggests alterations in our biodiversity are continuous and humans, while having an impact, are a part of that continuous change.

In the past, we have raised significant concerns with the mission statement that is placed on Albemarle County’s website regarding the Biodiversity committee.  It states there mission as ” The mission of the Natural Heritage Committee (NHC) is to maintain and restore the County’s native biological diversity and provide a healthy environment for the citizens of Albemarle County.” This is far broader than the authority granted by the Board of Supervisors.

Throughout this chapter I see the Biodiversity Committee as assisting and informing staff decisions without input from elected officials.  This is a mistake.

On page 2 of the chapter it states, without scientific back up, “Biodiversity is essential to human life”.  Later it indicates that humanity has an ethical responsibility to care for other life forms on earth.  How can the natural resources chapter place ethical constraints on other chapters.  Ethics, and religion, do not belong in the comp plan. Some might suggest that humanity has an ethical responsibility to provide adequate shelter to other humans but that does not appear in our affordable housing chapter.  Both these statements should be removed.

On Page 4 there is a map referenced regarding areas for mountain protection but it does not indicate how such map is to be determined or if it is the map that was refused by the Board of Supervisors previously.

Reading between the lines on Page 12 the Free Enterprise Forum believes the Biodiversity Action Plan should be renamed the Biodiversity Downzoning Plan.  We are most concerned that a biological inventory informing land use decisions might preclude landowners from exercising their property rights in the name of biodiversity with limited benefit.

While respecting the intentions of the overzealous Natural Heritage Committee we believe the introduction of biodiversity as a land use metric is simply a back door to population control and the potential extinguishing of development rights without compensation.

In addition we fear the Biodiversity action plan would be in direct opposition to much of the neighborhood model design of dense development and pocket parks in the development areas.

On Page 14 we believe Objective 1 strategy a – should include language about preservation of property rights while encouraging sensitive site selection and design ….

On Page 18 we believe the use of the term “tragedy of the commons” to be unnecessary and prejudices the document.

On page 19 under Objective 3 strategies a and b seem to be in conflict and need to be reworded or combined.

On Page 20 – The Free Enterprise Forum believes Comprehensive Plan language should suggest not dictate we ask that Strategy d be we worded as follows – “Consider watershed divides when evaluating any future changes to Development Area boundaries to coordinate land use planning and water resources policy.”

I also noticed a couple of typos which I will forward to staff.  Thank you for the opportunity to review and comment on this document

Respectfully Submitted,

 

Neil Williamson, President