Thursday, July 29, 2010

DJ McGuire's Spotsy Taxation History Lesson

Hold-the-what? A walk down memory lane
by DJ McGuire

Today we take a look at some local political history here in Spotsylvania.

One of the things I discovered in my campaign for the Board of Supervisors last year was the rather dubious record the county regarding taxes. In fact, the county has experienced sixteen property tax increases in twenty-two years (1988-2010). Now, truth be told, the county has so many recent residents (escaping even higher-tax jurisdictions), that this history hasn’t been highlighted much. Moreover, a number of the tax increases have come during reassessment years, where the tax rate was reduced, but not nearly enough to counteract assessment increases – and even when assessments fell (as they did this year), the tax rate rose by more than what would have equalized taxes.

This latter reason has, as one would expect, sparked quite the debate here. Many (including some Supervisors) have convinced themselves that the equalization concept (i.e., if the tax rate leads to a higher average tax payment, it’s a tax increase no matter what the rate is) is some recent creation of right-wing, anti-tax crazies trying to hamstring local government. So, I thought it best to take a walk down memory lane to see . . .

-How the tax rate was treated during reassessment years?
-What was done with taxes prior to 1988?
-When was the last time property taxes were actually reduced in Spotsylvania?
-The first question led me to the 1982 reassessment, in which property values rose 30% in the county. Keep in mind, this is 1982, long before the Republican Party elected any Supervisors in Spotsylvania (although Buford Carr was rumored to be one back in the day), let alone allegedly hijacked the tax rate discussion.

Yet what do we find as the headline for the budget story in the Free Lance-Star (emphasis added) . . .

"Spotsylvania sets hold-the-line tax rate of 65 cents

Cutting the budget to avoid raising the average tax bill, the Spotsylvania Board of Supervisors last night approved a $28.7 million operating budget for 1982-83 that drops the real estate tax rate to 65 cents . . ."

Hold-the-what?

As an added irony, none other than Emmitt Marshall (who in recent years has tried to wave off the equalization idea) made the initial motion for the 65 cent rate (county staff had proposed 68 cents). So clearly, the idea that assessments can make a rate “cut” an actual increase has a long tradition in Spotsylvania.

Meanwhile, I found that, somewhat surprisingly given the nature of the spending debate, that even though the 1970s and 1980s had faster growth in population than the later decades (from 1970 to 1990, population grew over 350%, compared to 212% for 1990-2010), they also saw fewer tax hikes (seven versus fourteen). Lest we forget, this is also despite the 1970s having two double-digit inflation spikes.

But what about a tax cut? Well, after looking at Board meeting minutes and a slew of FLS stories (the archives going back 80+ years are on-line now), we find that the last genuine act of tax relief for Spotsylvania homeowners came in June of 1975. Since then, we’ve had nineteen property tax hikes (and six presidents, nine governors, four sheriffs . . .)

Oh, and the overall budget has grown over 3600% in nominal terms since then (890% in real terms).

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