Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, April 17, 1993 TAG: 9304190223
SECTION: VIRGINIA PAGE: C-1 EDITION: METRO
SOURCE: JOEL TURNER STAFF WRITER
DATELINE: LENGTH: Medium
REAL ESTATE TAXES TOO HIGH? COUNCILMAN THINKS SO, BUT . . .
Even if the budget is tight, it's time for Roanoke City Council to provide tax relief for property owners.So says Councilman James Harvey, who adds that he won't vote for the new budget unless the real-estate tax rate is reduced.
City Manager Bob Herbert will present the budget to council on Monday.
Faced with rising costs and little growth in local tax revenues, the city manager is unlikely to recommend a tax cut.
But that won't deter Harvey.
"It's the principle of the thing. This council seems to be good at raising taxes, but not in cutting taxes," Harvey said.
"We haven't cut the real-estate rate for five years. I am going to insist on a cut."
The tax rate was reduced from $1.29 to $1.25 per $100 of a property's assessed value in 1988.
Herbert could not be reached for comment Friday.
Because of rising real estate assessments in recent years, Harvey said the rate should be trimmed by at least 2 or 3 cents.
A 2-cent reduction would lower the tax bill for the owner of a $60,000 house by $12 a year - from $750 to $738.
But that 2-cent cut would mean the loss of a total of $564,000 in tax revenues to the city, because each penny in the real-estate levy generates $282,000 a year.
In recent years, council has tripled the cigarette tax, increased the lodging tax and raised the fee for city decals.
Councilwoman Elizabeth Bowles said she would be cautious about cutting taxes now.
"I think we need to talk about it more. We probably should hold everything at its current level until the economy improves," Bowles said.
Council should also hold off considering a tax cut until Herbert presents his budget, she added.
Councilman William White said council could free up money for a tax cut by trimming administrative costs.
"A good place to start is the city manager's office. I think we can cut administrative costs without reducing services to our citizens," White said.
"I am looking for some way to help offset the increase in [real estate] assessments," he said.
Mayor David Bowers said he knows that some council members are talking privately about a tax cut.
Bowers said most of the budget goes for salaries for city employees, utilities, supplies and fixed costs. Councilman Howard Musser said he would like to see a cut in the real estate rate, but he's not sure that the city can afford it this year.
"If it's at all possible, I think we ought to reduce the rate, because the assessments keep going up," Musser said.
A rise in assessments increases tax bills - unless the rate is reduced. Harvey, a longtime advocate of lower taxes and efficiency in government, said most property owners have been patient in recent years.
The budget crunch has been heightened by increases in local tax revenues that have been below expectations and state aid that has fallen below the inflation rate.
At a recent planning session, Herbert said the city will have to rely more heavily on property taxes because of reductions in state aid for localities and the slow economic recovery. Roanoke's taxes are comparable to similar cities.
A study by the Commission on Local Government shows that Roanoke is classified as one of the highest "fiscally stressed" cities in the state - ranking it 10th among 136 localities.
Stress is based on a locality's tax capacity, tax effort and median income of its residents.
\ ROANOKE BUDGET FACTS\ A 1-PERCENT INCREASE IN THE FOLLOWING BUDGET CATEGORIES WOULD COST:\ \ City payroll base $500,000\ School payroll base $500,000\ School budget $695,000\ General fund budget (schools and other city operations) $1.6 million\ \ A PENNY INCREASE IN THE RATE FOR THESE TAXES WOULD GENERATE THE FOLLOWING REVENUE:\ \ Real-estate tax rate $282,000\ \ Personal property tax rate $43,000\ \ Cigarette tax $103,000\ \ Food and beverage tax $1.1 million\ \ Lodging tax on motel and hotel rooms $201,000