Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, July 8, 1995 TAG: 9507100081
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: DAN CASEY STAFF WRITER
DATELINE: LENGTH: Medium
Only days after the city opened its 1996 budget year, Mayor David Bowers is proposing cuts in the real estate tax rate and possibly the personal property tax rate on motor vehicles.
But Roanoke residents wouldn't see immediate relief. Instead, they would have to wait at least a year - just beyond the next mayoral and council elections.
In a letter to council, the mayor proposed that the issues be referred to budget study, an action that would postpone them at least until July 1996.
He also suggested that council consider tax credits for people who develop or buy and renovate homes in the city.
And in a separate letter to council, he suggested the city initiate a wide-ranging strategic planning process to improve the educational quality of city schools.
He called the plan "Top Schools 2000.''
Bowers is expected to elaborate on the ideas in his annual State of the City address Monday afternoon.
"I really get one chance each year to think about how I want to have the city move ahead," Bowers said Friday.
"This process this year isn't any different from any other year I've been mayor. I'd like to see us move in the direction that I'm pointing."
Already, however, some politicians - notably Republicans - are ascribing political motives to the tax-cut proposal.
And they say the notion of cutting taxes while improving education is contradictory.
"I think it's strange in that Mayor Bowers will be up for re-election in May," said city Republican chief William Fralin Jr.
Nonetheless, Fralin said he believes the tax cuts are a good idea.
"I'm sitting here thinking, `What a great setup for the 1996 mayoral race,''' said Councilman Mac McCadden, who called the letters "highly contradictory."
"Which do you want? Lower taxes or better education? I don't think you can do them both," McCadden added.
Councilwoman Elizabeth Bowles, council's longest-serving member, said she's uncomfortable recommending tax cuts right now.
"We know that there are so many needs in the city for services that we haven't been able to fund. Obviously, if you cut taxes, you won't be able to provide more services," Bowles said.
"Education is certainly something we have to give more money to. I feel there is somewhat of a conflict between the requests."
The city last cut its real estate tax rate in 1994, when it dropped from $1.25 per $100 of assessed value to $1.23. Between 1985 and 1988, under Mayor Noel Taylor, the rate dropped from $1.33 to $1.25.
Every 1-cent reduction in the rate would cost the city about $300,000 in annual revenue.
By comparison, Roanoke County's tax rate is $1.13 per $100 of assessed value.
But the average county homeowner's real estate tax bill is higher than the city's because property assessments are higher, on average.
The mayor said in the letter that he hopes council will lower the real estate tax rate in the future to make it the lowest in the region.
The last time the personal property tax rate was cut was in 1985, when council dropped it to $3.45 from $3.60 per $100 of assessed value.
Bowers said Friday that boosting schools' quality while cutting taxes isn't necessarily contradictory, calling the argument "mixing apples and oranges."
He denied that the timing of the tax cut proposal was politically motivated and said he hadn't decided whether to run for re-election.
Rather, he said, "I didn't have a sense during the fall and the winter of the excellent fiscal shape we're in."
The letter notes that general fund revenues last year were up more than 4.78 percent - an increase of $6 million. Of that, $3.6 million came in the form of additional real estate taxes, and $2 million came in additional personal property tax collections.
Vice Mayor John Edwards, a fellow Democrat, defended the mayor's proposals.
"I think it's a good idea, if cutting taxes would not hurt education," Edwards said.
And he noted that lowering taxes doesn't necessarily mean revenues would decline.
"The city has been creative in recent years in finding ways to enhance revenue without increasing taxes, such as industrial development," Edwards said.
For examples, he cited tax revenues gained by expansion of the Centre for Industry and Technology and the renovation of Hotel Roanoke.
by CNB