Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, May 8, 1993 TAG: 9305080071
SECTION: VIRGINIA PAGE: B-1 EDITION: METRO
SOURCE: JOEL TURNER STAFF WRITER
DATELINE: LENGTH: Long
Being a good politician, Roanoke City Councilman James Harvey knows the power of symbolism. He learned it when he was a leader of a taxpayers' group that pressed for reductions in the city's real-estate tax rate during the late 1970s and the 1980s.
Council's decision this week to trim the tax rate by two pennies in the next year will mean a savings of less than $20 for most homeowners.
For the owner of a $60,000 house, the savings will be $1 a month.
It won't be much relief.
But Harvey wants to send a message to financially strapped homeowners that he understands their plight, even if the city can only offer a small savings.
As the city's real estate assessments rose rapidly during the 1980s, Harvey and the taxpayers' organization kept pushing for cuts in the tax rate to help offset the higher values.
And council did just that, reducing the rate from $1.64 to $1.25 per $100 assessed valuation of property over a 12-year period.
Council has hoped to reduce the rate so it would be competitive with Salem and Roanoke County. Salem's rate is $1.18, and the county's $1.13.
But the gradual decline in Roanoke's rate came to a halt five years ago because the city could no longer afford it. The financial crunch was caused by the economic slowdown, a cut in state aid and the slow growth in local tax revenues.
The tax rate has been stuck at $1.25 since 1988.
Almost every year since then, either Harvey or Councilman Howard Musser, another former leader in the taxpayers' movement, has proposed a cut in the rate to help offset the increase in assessments.
While assessments have risen slower in recent years than in the early 1980s, some tax bills have increased by more than 30 percent since the rate was last cut.
Unlike the late 1970s and early 1980s, there have been no large protest meetings in recent years on the tax issue.
Still, Harvey believes many homeowners are hurting financially, even if they aren't holding meetings to protest the increase in their tax bills.
"We can't keep raising taxes and putting more burden on our residents," he said.
Harvey noted that council has raised several taxes in recent years on cigarettes, lodging and utilities. It has imposed a new levy, the meals tax, and began prorating personal property taxes. The city has also raised water rates, motor vehicle license decals and several other fees.
City Manager Bob Herbert and some other council members have said city finances would not permit a reduction in the real-estate rate. They successfully turned away efforts by Harvey and Musser in recent years to lower the tax.
But the pent-up desire by Harvey and other Democratic council members for a cut came together this year and prevailed on a 4-3 vote. Mayor David Bowers, William White and Musser supported Harvey.
It was a victory for the taxpayers' movement that helped elect Harvey and Musser, although it has been dormant for several years.
Neither Bowers nor White has been affiliated with the taxpayers' group. But they have strong support in traditional Democratic neighborhoods where the taxpayers' movement was the strongest.
Bowers, who has developed a closer working relationship with the business community since he became mayor, joined with Harvey and Musser, who refused to support him for mayor, on the tax issue.
Vice Mayor Beverly Fitzpatrick Jr. broke with his Democratic colleagues and joined Republicans Councilwoman Elizabeth Bowles and Delvis "Mac" McCadden against the tax reduction.
Fitzpatrick said the economy and city finances are too uncertain this year to reduce taxes. He said the city has many other needs, including the necessity to expand and upgrade the regional sewage treatment plant.
"This is not the year for a cut in the tax rate," Bowles said.
Fitzpatrick complained that the tax-cut proposal appeared to be politically motivated.
But the Democrats pointed to former Mayor Noel Taylor's proposal for reducing the tax rate by five cents, saying it was not a partisan issue. Before leaving office, Taylor, a Republican, urged council to set a goal of reducing the rate to $1.20.
Many teachers and Parent Teacher Association leaders oppose the tax cut, saying council should use the money for schools and larger pay raises for teachers.
The two-cent reduction will cause the city to lose $564,000 a year in tax revenue. But the city will lose only half that amount during the next year because the rate reduction won't take effect until Jan. 1, halfway through the fiscal year.
Dorothy Cooper, president of the Roanoke Education Association, said that $564,000 would provide an additional 1 percent pay raise for teachers and help meet other school needs.
Cooper said the cut in the tax rate won't mean much for property owners individually, but collectively it is a substantial amount.
Teachers will receive an average raise of 4.1 percent in the next year, but many will get only 2 percent.
Jay Turner, a School Board member, said money from the tax cut could have helped close the gap between salaries for Roanoke's teachers and those in Salem and Roanoke County. Roanoke's salaries are the lowest in the Roanoke Valley.
"We have so many needs. It bothers me that they would cut the tax rate," Cooper said.
About 200 teacher, parents and other supporters appealed to council to provide more money for schools at last week's hearing on the budget.
Council provided an additional $148,000 for more elementary guidance counselors and teachers to reduce class sizes in primary grades.
The rate reduction will help elderly homeowners, especially those on fixed incomes who are hard-pressed to pay higher tax bills because of rising assessments. Roanoke has one of the highest elderly populations in the state.
Homeowners who are 65 and over already are eligible for a freeze on their real estate taxes if they meet income and net-worth guidelines. They can have their taxes frozen at the level they were when they reached 65 if their income is less than $22,000 and their net is less than $75,000.
by CNB