
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, April 19, 1990                   TAG: 9004190592
SECTION: EDITORIAL                    PAGE: A14   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Short

REAL ESTATE

ROANOKE City Councilman Howard Musser, up for re-election, wants council to consider shaving the real-estate tax rate by a couple of pennies. City Manager Robert Herbert says Roanoke can't afford it.

Maybe, maybe not. But let's get one thing straight: Keeping it at $1.25 per $100 of assessed value is not the equivalent of a 7-cents increase in the rate.

The notion that it is derives from the fact of the 6 percent increase this year in assessed values - the basis on which the rate is applied - of Roanoke real estate. To generate the same revenue this year, goes the argument, the rate would be only $1.18.

But playing this sort of game gets tricky. A couple of other pertinent facts also should be taken into account.

One is the fact of inflation, which in 1989 ran about 4.5 percent. That's less than the rise in Roanoke real-estate assessments, but not a lot less. To generate the same after-inflation dollars this year as last, the rate could be cut only to $1.23.

The argument also skips over the fact of economic growth. In 1989, America's gross national product rose by 3 percent. Assume Roanoke's economy turned in an average performance. In terms of after-inflation ability to pay, the numbers work out to this: If the real-estate tax rate is truly to stay the same as last year's, it should rise to $1.27!

by CNB