Tuesday, May 1, 2007

Real Estate Tax Rates

Gadabout has been paying attention to tax rate debates here in Virginia Beach, and other border communities of Chesapeake and Norfolk. John Moss, Chairman, Virginia Beach Taxpayer Alliance said, “A few people can make a difference,” at a rally this past Sunday. I think he is right since his efforts made the front page of the local rag. City leaders generally don’t like organized groups of citizens demanding change. Unfortunately, groups like Taxpayer Alliance are usually driven by overly simplistic agendas, such as “reduce the tax rate to 78 cents.” Okay, what do you want to give up? Cities cost a lot of cash to operate!

Let’s look at tax rates. Virginia Beach taxes residential real estate at around $1.00 per hundred dollars of assessed value. If you own $500,000 home, you’ll pay about $5,000 per year in real estate taxes. If the rate were reduced to 78 cents, the tax would be $3,900. Wow, that’s a whopping $1,100 in savings, which is equivalent to about 35 bottles of decent Scotch whisky.

What are we going to give up in return? City Managers have professional staffs that work out yearly budgets with a great deal of oversight. They factor future capital expenditures, growth patterns, infrastructure upgrades, public/private partnerships—all being driven by competing interests. Virginia Beach proudly boasts a great boardwalk—that cost $$$. I am glad it was not axed out of the budget 20 years ago to save a few bucks. The city has a pipeline that supplies water from Lake Gaston that allowed for growth which in turn increased property values. I am glad that city officials didn’t give up on the 25 year dream that became reality to save a few bucks. A new boat ramp was built 5 years ago near my house that has become a showcase of recreation and bay accessibility for boaters and beachgoers. I am thankful that this great facility was built, at great cost, for the enjoyment of all instead of saving a few bucks. A new traffic light was recently installed near my home allowing me to make left turns out of my neighborhood. I am certain that was not cheap! So, what are we going to give up?

My point here is that I believe challenges to city government spending is healthy in the since that the big guys know that citizens are looking over their shoulders, but simply demanding tax cuts on a yearly basis is myopic. We all want good roads, schools, libraries, police and fire forces, and reliable trash pick up. So the argument should not be general and wide in scope, but instead more project/program specific. Are consulting fees excessive? Are specific programs experiencing cost overruns? Are schools top performers? Gadabout believes we need to look at the details instead of marching around with dorky signs demanding across the board reductions.


Anonymous said...

Gadabout the Golden Sewing Machine is in place above the cubicle

Gadabout Jack said...

The plan is coming together!