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

DATE: FRIDAY, June 15, 1990                   TAG: 9006180198
SECTION: EDITORIAL                    PAGE: A-14   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

TAX TIDE RISING IN ROANOKE COUNTY

IT WASN'T more than a couple of months ago that the Roanoke County supervisors were whooping it up for a 2-cent cut, from $1.15 to $1.13 per $100 of assessed value, in the county's real-estate tax rate.

Never mind that the schools which are the county's pride were running $1 million in the hole. Never mind that, under the supervisors' agreement with the schools, half the bailout must come from the schools' 1990-91 budget hide. And never mind, as events of recent days have shown, that the county faces huge costs in developing a water supply to meet current, let alone future, needs.

Exhibit A is the proposed reservoir in the Spring Hollow area west of Salem. When county voters in November 1986 approved a $16-million general-obligation bond issue to design and build the dam and reservoir, it was to be a joint project with Salem and Roanoke City. But as projected costs rose and the cities - whose immediate water needs are less pressing than the county's - took another look, they bowed out. That has left the county holding a $53-million bag.

This week, County Administrator Elmer Hodge offered outlines of a plan to finance the debt that will have to be incurred. Some of the money can be raised through higher water and sewer fees and the addition of more water and sewer customers. Presumably, too, the county no longer would have to buy water from Salem and Roanoke City, which could free as much as $350,000 yearly to apply to debt servicing.

That won't be enough. Hodge also suggests raising the county's utilities tax rate from 6 percent to 12 percent, the maximum allowed under state law, and extending it to water bills. It would, he says, yield an estimated $1.8 million per year in new revenues.

No small matter, that. Raising the real-estate tax rate by a penny yields only about $270,000 per year in additional revenues. Hodge's utilities-tax proposal is the equivalent of a nearly 7-cent increase in the county's real-estate tax rate - and dwarfs the 2-cent cut in property taxes of which the supervisors are so proud.

The point is not the relative fairness of real-estate vs. utility taxes. Nor is the point the wisdom - or lack thereof - of the Spring Hollow project, an issue grown more complicated by environmental and cost concerns and by slower-than-expected growth in valleywide demand for water.

The point is that county residents should brace themselves for rising taxes, whatever the form such taxes might take. They also should be aware that, because of the county's strongly residential character, the burden of additional taxation - utility or real estate - will fall heavily on homeowners rather than businesses.

A Roanoke City-County merger would diversify the tax base, allow efficiencies in government and, over the years, ease the county's financial bind. But loosening bonds isn't the same as cutting them.

Forget this year's 2-cent cut in the real-estate tax. County supervisors can't for long fool the public about that. The fact is that the pressure on county taxes is upward. The question is how much they'll have to rise.

by CNB