There's been some lively discussion on this blog about the real estate tax assessments which were just mailed this week.
But there may be some fuzziness about "rates" and the amount we are paying, so the Growler will try to help explain this. There is a difference between the tax rate and the fair market value of one's home. However, both are needed to calculate the final tax owed.
The City calculates the fair market value of each home annually (a schedule which is much more aggressive than other jurisidictions in the Washingto metropolitan area). These assessments are issued in January or February. For years, fair market value has been rising due to a booming housing market. And as we all know, many single family homeowners like the Growler saw a slight decrease in assessed value this year because home sales (used as the determinant of value) were down and sellers had to drop their prices to move the properties. That means some homes may be less valuable in 2007 than in the previous year, at least for tax purposes.
The taxation rate is applied to each $100 of assessed value and is set later by City Council based on what the proposed budget looks like.
And that's where things get interesting. Politicians and bureaucrats can claim they are lowering the tax rate, but you and the Growler and everyone else has been paying steadily rising taxes from 2000 to 2006 because the lower rate was being applied to a higher value.
Let's use the late Helen Miller's house at 1301 Queen Street as an example. It hasn't been renovated or expanded, so the appreciation is solely due to increased buyer activity in Parker-Gray.
FY2000 tax rate: $1.110
Assessed value of 1301 Queen: $134,500
FY 2000 tax bill: $1,492.95
FY2001 tax rate: $1.110
Assessed value of 1301 Queen: $157,800
FY 2001 tax bill: $1,751.58
FY2002 tax rate: $1.080
Assessed value of 1301 Queen: $184,600
FY 2002 tax bill: $1,993.68
FY2003 tax rate: $1.035
Assessed value of 1301 Queen: $214,500
FY 2003 tax bill: $2,220.08
FY2004 tax rate: $1.035
Assessed value of 1301 Queen: $299,300
FY 2004 tax bill: $3,097.76
FY2005 tax rate: $0.995
Assessed value of 1301 Queen: $382,300
FY 2005 tax bill: $3,803.89
FY2006 tax rate: $0.915
Assessed value of 1301 Queen: $454,400
FY 2006 tax rate: $4,157.76
We don't know the rate for 2007 yet, but these figures demonstrate that the tax bill for 1301 Queen rose a staggering 278.49% from 2000 to 2006, even though the rate was lowered several times (with much crowing and posturing by politicians). These increases occurred all around the City but are most noticeable in Parker-Gray, which as a gentrifying neighborhood has had some of the greatest appreciation of all.
Now that raises two questions:
1. What have the politicians been doing with this windfall? and
2. Why aren't they plowing it back into Parker-Gray improvements now that the district is contributing a hefty sum annually to the City's coffers? Do they still think of us as a drain on resources?
12 comments:
"1. What have the politicians been doing with this windfall? and
2. Why aren't they plowing it back into Parker-Gray improvements now that the district is contributing a hefty sum annually to the City's coffers? Do they still think of us as a drain on resources?"
1. SPENDING IT - on "nice to haves" that create a level of expectation for future spending that is unsustainble. So when the school board passed its seemingly annual 8% budget increase request and the social services organizations did their usual "we need 20% more" speeches, they did it because they are basing their spending habits on what we "used to have" rather than "what is realistic". Now it comes down to - does Council have a pair to stand up to them?
Everyone knows they used hocus-pocus last year (deferring capital improvement projects) to make it look like the budget was balanced. Krupicka saw that right away.
2. This sounds like your classic "taxation without representation" problem
Add in the fact that the drains on the city budget (social services, public housing, etc...) are drains that most PG residents have no say in, and its why so many PG residents get enraged when so much gets taken out from PG with little in return.
Lots of taxes for little in services
"What have the politicians been doing with this windfall?"
Spending it as fast as they can on their special interest groups. We arent one of them.
"Do they still think of us as a drain on resources?"
Apparently. It seems most of the other wealthy areas of the City can get whatever improvements they want if they just complain. We cant even get a public housing dispersal.
Growler,
Interesting point raised in this week's Alexandria Times regarding development:
"After seven years of double digit increases, the existing residential tax base declined by about 2.9 percent.
This decline was nearly offset by more than $400 million of new construction added to the rolls. On the commercial side, however, increases continued although at a slightly more modest pace. The overall value of commercial real estate increased by more than $1.5 billion with new construction, contributing almost $300 million of that figure."
So essentially, residential property tax revenue (the bulk of all City revenue) was flat, but only because of all the new residential construction going on.
Lends credence to your theory that City leaders are simply building their way out of making hard decisions on spending. The sad thing is commercial revenues rose nicely but the City doesnt have the retail and commercial base to take advantage of it.
Today's enews release suggested the City Manager is proposing a tax rate of $.815 per $100. While I agree with the last poster I think the jury may still be out regarding Hartmann's fiscal management. Either he is slowly accomplishing or the city's pr has improved.
The proposed city budget has no room for new capital improvements for parker gray. The city manager is cutting programs in this year's budget. In the boom years, the city put more money into capital (new schools, fixing sewers, open space purchases, roads, sidewalks, etc.), hired new police and emergency resposne staff, and kept paying for large metro increases (one of the fastest growing areas of the budget and one we in parker gray depend on) and on salaries for staff (low unemployement and growth in the region has government fighting for employees). Inflation does not correspond to the cost of these things, so its a red herring to compare it. We can't have it both ways, if we want good staff and police in parker gray, we have to pay for them. If the Growler wants the city to spend millions on new open space in parker gray, then the money has to come somewhere. Other than the schools, social services have not seen big increases in spending over the last few years. Compared to inflation, many social services are down. We can't complain about Jeff Houston and then not want to pay for improvements to it. I don't like the fact our areas has become more expensive. But no government policy is going to really change the cost of housing, the market rate cost for employees, the cost of infrastructure or construction (those brick sidewalks the growler loves cost much more than cement to maintain and repair), or the cost of open space.
My property value went down, so in essence, I am getting a tax cut this year. I'm not sure that is such a great thing if it means services are being cut. I wouldn't mind an almost flat rate this year, but down and less services doesn't sound good. I know Macdonald has talked a few times about the need to raise the tax rate (I love how he saught the endorsement from the tax cutters last year and now is the biggest proponent for tax increases -- that was very sly of him) I wonder if the rest of council has the courage to do it?
Our assessment went up about 2% this year. Show me what's been built around the Lofts that would cause this to happen?
"the cost of infrastructure or construction (those brick sidewalks the growler loves cost much more than cement to maintain and repair), or the cost of open space."
Sorry but you are missing the obvious. We ask developers for contributions to same. The Lofts has brick sidewalks as a condition of their SUP. The Prescott has brick sidewalks because it is both within a historic district and as a condition of the SUP. The Monarch has no brick sidewalks because the want for consistency was ignored. CarrHomes additionally was asked to contribute to the city's open space fund as well as to contribute to improvements along Queen Street. The Laundry project was also asked to contribute to the open space fund as well as underwrite a neighborhood parking study. Shall I continue? So my wimpy friend, it's all in the approach.
"Our assessment went up about 2% this year. Show me what's been built around the Lofts that would cause this to happen?"
Your assessment is based on sales of like homes, probably other properties in the Lofts that sold in 2006. It means buyers are willing to pay a premium to live in the Lofts regardless of the surroundings and even in a slow market.
Be prepared to have the politicians throw that back in your faces when it comes time to discuss public housing.
"it's all in the approach."
The only wimpiness in this situation is City leadership, from the issue of improvements to the issue of public housing.
Its not the ICCA's or PG residents job to figure out the obvious; that we need new sidewalks throughout PG and that we need to stop the concentration of public housing in our area. Its the City Council's job. If they are too spineless or budy to tackle the issue or do the obvious and ask developers to contribute, then you have to ask yourself:
Why do you continue to vote these people into office when you know they don't care about you?dxz
"Its not the ICCA's or PG residents job to figure out the obvious;"
If if it's not the ICCA's job then the Board needs to step aside in favor of those who will and have done it. Council members are part-timers. How many par-timers do you know who approach a problem thoroughly?
"If if it's not the ICCA's job then the Board needs to step aside in favor of those who will and have done it. Council members are part-timers. How many par-timers do you know who approach a problem thoroughly?"
How many times do people need civic lessons? The ICCA has no authority to do anything. Even if the ICCA wanted to solve problems, it cant. Only the City government can do that.
The ICCA or Bud Hart or Cromley dont have the authority to revoke Resolution 830 or underground power lines or get buildings shrunk to smaller sizes. Only your city leaders, who seem to get elected year after year from the same party, have that power.
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