ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Thursday, January 23, 1997 TAG: 9701230020
SECTION: EDITORIAL PAGE: A-10 EDITION: METRO
IF TALK of cutting Roanoke's real-estate tax rate is just political grandstanding by some on City Council, they ought to drop the chatter and move on to genuine business. But if they're serious, they'd do well to keep in mind a couple of points:
No cut should be made that would jeopardize the city's excellent bond rating. Roanoke has a history of sound debt management, which pays off in access to credit and in lower interest rates. This history should not be squandered.
No cut should be made solely because assessments of property values rose this year by an average of 3 percent. The proper yardstick is whether the benefits of lowering the rate a notch or two outweigh the cost - the forgone revenues and lost services that those revenues could have paid for.
None of which is to say the rate couldn't or shouldn't be cut. The current rate, $1.23 per $100 of assessed value, is not sacred. If there's budgetary room for a modest tax cut, the real-estate tax is a good place to do it - to economize in government, to ease the burden on residents, and to remain competitive tax-wise with neighboring localities.
Maybe such room exists. While the 3 percent increase in real-estate assessments reflects routine inflation and is in itself no reason to cut the rate, it's possible that inflation in the city's overall costs of doing business averaged a bit less. Meantime, restructuring, process improvements and privatization (or the threat of privatization) offer opportunities for municipal savings. So would a much-needed, more aggressive approach to regional cooperation. One way to put such savings to use could be to lower the real-estate tax rate.
On the other hand, Roanoke needs to retain sufficient fiscal flexibility to respond to future uncertainties. What, for example, will be the financial impact of continued decentralization of federal powers and responsibilities? Will welfare reform raise local costs?
Might Roanoke's next marquee economic-development project involve municipal outlays? For example, a downtown higher-education center in a now-vacant Norfolk Southern office building might win state funding. But the city could incur costs for maintenance and investment in other properties deeded over by the railroad as part of the package.
While the city has stayed on its self-imposed schedule to bring teacher salaries up to the national average, salaries are not there yet. And although Roanoke is generally a well-run city, work is needed in certain areas - such as rental inspections and parks and recreational facilities - due in large measure to chronic underfunding in the past.
It's easy to call for a tax cut. The hard part is figuring out how to do it in ways that don't harm the city, in ways that neither reduce current services below proper levels nor threaten underpinnings of the city's long-term health.
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