ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, February 2, 1996 TAG: 9602020009
SECTION: EDITORIAL PAGE: A-7 EDITION: METRO
SOURCE: AARON SMITH
ON DEC. 11, Roanoke City Council voted unanimously to ask the General Assembly to amend the Code of Virginia to allow for a 2 percent retail sales tax on motor-vehicle fuels sold within the city of Roanoke, Roanoke County (including Vinton) and Salem. Citizens need to act now to make certain that no 2 percent vehicle-fuels tax is imposed anywhere in the Roanoke Valley without first being approved by the voters in a referendum.
If the Virginia code is amended to allow a 2 percent vehicle-fuels tax in the Roanoke Valley, Roanoke city intends to create a Roanoke Regional Transportation District consisting of the jurisdictions of Roanoke city, Roanoke County and/or Salem. When one considers the spending and taxing record of the current Salem City Council members, and the excessive revenues promised by the 2 percent vehicle-fuels tax, it is a foregone conclusion that Salem will eagerly join the Transportation District (as will, in most likelihood, Roanoke County).
Salem spending, revenues, employment and long-term debt increases have become such a problem that Salem City Council members must be positively salivating at the prospect of yet another tax. Salem spending increased 87.7 percent from 1984 to 1995, while there was only a 47.6 percent inflation increase and almost no population increase. Salem revenues (excluding long-term debt assumption) increased 88.5 percent from 1984 to 1995. The increase in full-time Salem municipal employees was a whopping 35.4 percent from 1983 to 1995. The long-term debt assumed by Salem during the current three-year period will exceed the total of the long-term debt assumed during the prior 12 years combined.
Ostensibly, the purpose of the Roanoke Regional Transportation District would be to ``preserve and expand the mass-transit system within the district.'' The revenues generated by the 2 percent vehicle-fuels tax would take the place of diminishing federal subsidies. But when one looks closely at the dollars involved, it is apparent that the fuels tax would generate excessive windfall revenues.
A 2 percent vehicle-fuels tax would presently generate about $1.4 million for Roanoke city, $720,000 for Roanoke County, and $380,000 for Salem. Valley Metro, the only ``mass-transit system'' in the Roanoke Valley, currently receives $729,000 from the federal government, $671,000 from Roanoke city, and $35,000 from Salem. (I am uncertain exactly how much Roanoke County contributes, although I am certain it is considerably less than Roanoke city.) If the 2 percent vehicle-fuels tax is imposed in the Roanoke Valley, next year Roanoke city would receive $538,000 more in fuels-tax revenue than it would contribute to Valley Metro (even though Roanoke's contribution must increase by $191,000 to cover a reduction in the federal subsidy). Even if all federal Valley Metro subsidies are eliminated as anticipated by 1999, Salem's contribution would increase to only $70,000, resulting in excess fuels tax revenue of $310,000. The windfall in excess Roanoke County revenue would likely exceed $500,000.
How would our local governments use the exorbitant fuels-tax revenues? For the first year only, the Virginia code requires that the Roanoke Valley governing bodies reduce their real-estate tax or other locally levied taxes by an amount equal to their contribution to Valley Metro ($862,000 for Roanoke city and $35,000 for Salem). The informed citizen knows that these tax reductions would, indeed, last only one year, and our local governments would spend all the fuels-tax revenues in subsequent years. Also, there would be no reduction in our state taxes, which are the primary sources of funds for transportation projects in the Roanoke Valley.
Finally, you can bet that our current greedy and spend-hungry local elected officials would find ways to get their excess fuels-tax revenues into their general funds so they can continue to spend our hard-earned money on questionable projects, such as multimillion-dollar pedestrian bridges, unnecessarily large municipal office buildings, and baseball stadium cost overruns.
Perhaps a majority of Roanoke Valley citizens do not share my belief that our local governments receive enough revenues so that no new taxes are needed if spending is restrained. Many citizens may feel that a 2 percent vehicle-fuels tax is needed so that our local governments can remain progressive. The best way to identify the collective wisdom of the citizens is through binding referendum, where the voters in each locality decide whether to impose the fuels tax on themselves. Provision for referenda on the 2 percent vehicle-fuels tax can be made in Virginia Code secton 58.1-1720 by including a qualifying phrase such as ``provided that this tax has been approved via referendum in accordance with section 24.2-684 by the voters within the county or city.''
One thing is certain for those concerned citizens who favor a referendum for any 2 percent vehicle-fuels tax - no one on our local governing bodies will vote to support a fuels-tax referendum. In addition to the unanimous vote in support of the fuels tax by Roanoke City Council, Salem City Council declined to vote against this tax on Dec. 11. In fact, Salem City Council voted unanimously on Nov. 27 to tell the Virginia General Assembly that not only should a vehicle-fuels tax be carefully considered in a positive light, but also an additional half-cent local-option sales tax and real-estate transfer taxes, a reduction in the number of sales-tax exemptions, and even a local-option income tax.
The best chance for a concerned citizen to make sure that any 2 percent vehicle-fuels tax is imposed only after a referendum lies with Gov. George Allen. Allen must promise to veto any bill that imposes a Roanoke Valley fuels tax without a referendum.
Aaron Smith is treasurer of the Salem Taxpayers Association.
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