This morning, Albemarle County Supervisor,
(I-Jack Jouett), appeared on WINA’s
with Jane Foy and Rob Schilling, and spoke with callers about tax rates, the budget, and expanding businesses in the community. The highlight of the radio program was when Mr. Rooker predicted the County’s tax
would be lowered in this year’s budget and then
, Chairman of the Albemarle County Republican Party, called in and debated the exact meaning of that statement and the effect on local taxes.
Listen using player above or download the podcast
There are two perspectives being expressed by these local leaders and I’ll do my best to outline their positions here. First, some terminology per state law [link to
Code of Virginia
Current Real Estate Tax Rate
– The rate per $100 of assessed value that is applied to real estate. In Albemarle County, the current rate is $0.74 per $100. That is about $2,368 annually in property taxes for homes assessed at the median sales price in Albemarle (4Q 2006).
Lowered Tax Rate
– A tax rate local government must advertise that would, in effect, offset increased property assessments. This rate has to be calculated and advertised, but local government makes a choice each year, only after a public hearing, as to whether this rate should be adopted or another tax rate set if deemed necessary.
Proposed Tax Rate
– The rate per $100 of assessed value that is applied to real estate and proposed for adoption for the current calendar year. [Warning: The new tax rate is set for the
so adjustments up or down from the current tax rate are retroactive to January 1st
. Having a fiscal year that runs from July 1 to June 30 makes this interesting in the budget process].
Effective Tax Rate Increase
– The difference between the
. This effective tax increase has to be calculated and advertised by local government as part of their public hearing announcements.
Dennis Rooker’s position:
Keith Drake’s position
(Sources: Albemarle GOP eNewsletter–Vol. 9, #4, February 6, 2007 and WINA February 13, 2007):
Thus you can see why I chose the headline for this post very carefully!
The public should be aware of the fact that people have different points of view as to how characterize the annual setting of the tax rate and what Virginia law intends by requiring government to advertise the specifics about this issue in advance of the public hearing. Further, elected officials typically direct the County Executive (or City Manager) to prepare a budget based on certain assumptions on the tax rate around November. Proposals to significantly raise or lower the tax rate thus could be expected to be addressed at that time and not just right after the updated property assessments are calculated (i.e. government has a projection in November as to how assessments will impact revenues).
There is no disagreement on the bottom line…
every year, local government sets a tax rate.
If assessments are increasing and the rate isn’t lowered as an offset, then revenues will increase and government will make decisions in their budget as to how to best invest those new resources in the community.
Here is the schedule for the upcoming decisions in Albemarle County
see calendar for details