By. Neil Williamson, President
Often the most enlightening questions start with, “What if?”
Working with co-author Derek Bedarf, we looked at developing empirical data to answer the question, “What if Charlottesville’s annexation was successful compared with the results of the negotiated Revenue Sharing Agreement?”
After significant research and deliberation, it was determined that this information was available but not assembled in a manner that made such calculations easy. Utilizing Geographic Information System (GIS) technology for the real estate assessment data and 15 years of Albemarle County budget documents for the other taxes (sales taxes, consumer utility taxes, business taxes, motor vehicle licenses and prepared food and beverage taxes. Other taxes excluded from this study, for a variety of reasons, include utility consumption tax, short term rental tax, clerk fees, transient occupancy tax, penalties interest, and audit revenues), The Free Enterprise Forum calculated the tax revenue generating power of the study area.
The resulting “Hindsight Report” examines the tax generating power of the proposed annexation area as it compares with the revenue sharing payments.
- The Hindsight Report indicates that over the study period (2001-2016), Albemarle County received, from the study area, over $277 million in local tax revenue compared with the $212.9 million revenue sharing payments made to the City of Charlottesville (+$64.1 million).
- Had Charlottesville been successful in the annexation and the revenue sharing agreement not been in place, the City would have received $304.7 million in tax revenue from the study area during the study period compared with $212.9 million in revenue sharing payments from Albemarle County (-$91.8 million).
- During the study period, study area property owners paid $72 million less in real estate taxes by being in Albemarle instead of the City of Charlottesville. This “Non-Annexation” Dividend averaged saved (Albemarle) property owners between $3 million and $4 million annually topping out at $6 million in 2007.
The question the data does not answer is whether the Revenue Sharing Agreement was a good deal for all involved. This is a subjective question that can only be answered in context.
At the time, the historical record suggests annexation was a very real threat and revenue sharing negotiations were heated.
The historical public record also shows many citizens at the public hearing raising some of the same questions regarding equity and fairness that remain part of the discussion today.
Was it a good deal?
Hopefully this data will help you decide.
The Albemarle County Board of Supervisors is scheduled to discuss the Revenue Sharing agreement during their second August meeting on Wednesday August 9th.
Founded in 2003, The Free Enterprise Forum is a privately funded, public policy organization focused on Central Virginia’s local governments.
The entire Hindsight Report can be accessed at www.freeenterprisefoum.org under the reports tab.
Neil Williamson, President
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.