Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, May 29, 1990 TAG: 9005290153
SECTION: VIRGINIA PAGE: B-3 EDITION: NEW RIVER VALLEY
SOURCE: Associated Press
DATELINE: LENGTH: Long
"The problem right now is local governments are being forced from every angle to expand government services," said Spencer Elmore, who has advised numerous governments on their financial affairs.
"There is very little doubt the localities are going to look for every opportunity to generate new or additional revenues," said Elmore, a principal with the Richmond accounting firm of Robinson, Farmer, Cox Associates.
Raising the property tax rate is unpopular and some local governments hope they can lessen the pressure on officeholders by looking to different revenue sources to help balance budgets.
In Norfolk recently, there was an uproar when the City Council voted unanimously to impose a 7 percent utility tax on cable subscription fees starting July 1.
Cox Cable of Hampton Roads argued that it is "not a utility by anybody's definition." Council members disagreed.
"We are in a financially stressed condition," said Norfolk Mayor Joseph Leafe.
A 3-cent increase in the real estate tax rate was earmarked for a new police program to combat drug trafficking. To cope with increasing demands for social services, the city had to look elsewhere for new revenue.
Along with cable television, the city is increasing its taxes on meals, lodging and entertainment. The city also plans to raise fees on everything from parking and garbage collection to burials.
Cities can raise various fees and enact new taxes, but Virginia law has traditionally denied many of those options to counties. Many counties, however, are growing faster than Virginia's cities and have found themselves pressed for some time for new revenue.
"Quite frankly, there's nothing available to the counties. We don't have the taxing authority cities enjoy," said Albemarle County Executive Guy Agnor. "We're waiting on General Assembly action to equal out those taxing powers. We're living with what we have until some provisions are made."
While officials await the outcome of legislative proposals, there are some options available to counties, especially in rural localities that have not tapped all available revenue sources.
Prince Edward County Administrator Mildred Hampton estimated that the county will bring in $250,000 by taxing the cars that students at Longwood and Hampden-Sydney colleges bring to the county.
"More than 300 people came to a public hearing to support full funding of the school budget," Hampton said. "The board decided it could afford to give it to them this year."
College communities other than Prince Edward tax student automobiles and the attorney general's office has approved the practice for cars that are at college more than half of the year. The cars taxed in the college community may not then be taxed in the student's home town.
The change in Prince Edward's policy toward student cars has not been controversial among students and parents, because most live in areas where the personal property tax is higher than Prince Edward's rate of $3.20 per $100 of assessed value.
Automobiles also figured in Chesterfield County, where the School Board, to help balance its $216.1 million budget, approved charging a $50-per-year parking fee to high school students who drive to school.
The estimated $150,000 raised by the parking fee will be used to hire a guard for each high school and the vocational-technical center.
Elsewhere across Virginia, Elmore said many counties have untapped revenue in the form of utility franchise, consumer utility, and room and meals taxes.
But in Northumberland County such levies would not do much good, said Administrator John Burton. Like other rural counties, he said, Northumberland does not have many motels and restaurants and such taxes would yield "not enough money to bother with."
"Rural counties have few options," he said.
In Prince George, a formerly rural county that has courted business and is experiencing some suburban growth, the government is considering raising several fees to boost revenue and is starting a $2 courthouse maintenance fee. The fee, assessed against everyone convicted in General District and Circuit Court, would be used to help maintain the new building.
Beyond fees, some Virginia cities are turning to options that never would have been considered a generation ago. In Petersburg, once home to a major cigarette manufacturer, Brown and Williamson, the thought of taxing cigarettes proved to be too much to bear, however.
City Manager Richard Brown proposed a cigarette tax of 20 cents per pack to raise money to help city schools. The proposal survived a couple of budget work sessions, and the city ended up advertising a tax of 10 cents per pack.
But the tobacco industry marshaled resistance.
"Petersburg was built on tobacco," said Page Sutherland of the Tobacco Institute in Richmond. Local businessmen complained that smokers would simply go outside the city to buy cigarettes and groceries.
The tax now appears dead, though the City Council has yet to approve the budget. An effort to enact a cigarette tax also failed in Richmond, where the council, for the most part, rejected a series of alternatives proposed by City Manager Robert Bobb to shift taxes from the homeowner to the consumer.
In Fredericksburg, however, the council has given tentative approval to a cigarette levy, along with increased taxes on commercial and industrial utility customers.
As City Manager Anthony Hooper put it, "This may be the first in a number of tight budgets."
by CNB