ROANOKE TIMES
Copyright (c) 1995, Roanoke Times
DATE: Thursday, December 28, 1995 TAG: 9512280046
SECTION: CURRENT PAGE: NRV-2 EDITION: NEW RIVER VALLEY
DATELINE: CHRISTIANSBURG
SOURCE: BRIAN KELLEY STAFF WRITER
New homes in Montgomery County cost far more in government services than they bring in through tax revenues, a recent study concludes.
For every dollar in taxes received from the residential sector, $1.20 is needed in services, according to the study prepared for the county Planning Department.
Farming and commercial-industrial development are far more cost-effective. For every tax dollar received from the agricultural sector, the county spends 35 cents in services. Commercial/industrial development is an even better bargain: each dollar in taxes it produces costs the county only 9 cents.
The results roughly mirror studies conducted in Rappahannock County on the fringes of Northern Virginia and in New York state, writes author Walter Penn, a Radford University graduate who conducted the survey as an unpaid intern this fall for Montgomery County.
"Montgomery County has a system in place where growth in all land-use sectors is allowed, with little or no planning. This system, also known as sprawl, has occurred in other counties and states," Penn wrote. "In other studies ... it has been found that sprawling's cost outweighed its benefit."
For instance, in Rappahannock, residential development cost $1.39 for every $1 in tax revenue produced. Yet farming cost just 17 cents per dollar and industrial-commercial development 30 cents per dollar.
In the New York study, conducted by Cornell University, residential development cost $1.36, farming cost 21 cents and industrial-commercial cost 29 cents.
Montgomery Planning Director Joe Powers distributed Penn's study to the county Planning Commission last month, as another item of discussion related to the on-going update of the county's 1990 comprehensive plan.
The Penn study's conclusion tends to support arguments made by some Planning Commission and Board of Supervisors members that residential development should be centralized near where services are available. In this view, allowing subdivisions to be built pell-mell in rural areas - as is the case in the Riner area - costs the county financially in both the short and long runs. In the short term it puts a burden on county schools without providing the benefit of increased tax revenue; in the long term, it could cost millions more to extend water and sewer services should individual wells and septic systems fail.
Yet the favorable numbers for industry and commercial development would tend to back up those who argue the county should be doing more to attract new plants and businesses to the area. From that viewpoint, new, nonservice industry and nonretail businesses will more than take up the slack for residential development's costs. That's one of the arguments behind the county's multimillion dollar investment in the Falling Branch industrial park beside Interstate 81 in Christiansburg.
To prepare his analysis, Penn relied on the county's 1994-95 fiscal year audit. He broke down tax revenues and public expenditures into the three broad sectors. Some items were "pure items" that were easy to delineate by sector. Others were judgment calls on which Penn consulted with individual department officials and with the commissioner of the revenue office.
The biggest single contributor to the cost of residential development was the county school system, according to Penn's study. But trash pickup and disposal, parks and recreation, health and welfare and human services were other areas where spending was attributed primarily to residential users.
The numbers break down as follows:
Residential expenditures, $59 million; revenues, $49 million; 1-to-1.20 ratio.
Agricultural expenditures; $912,974; revenues, $2.58 million; 1-to-0.35 ratio.
Commercial/industrial expenditures, $795,528; revenues, $9.3 million; 1-to-0.09 ratio.
LENGTH: Medium: 75 linesby CNB