ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, September 27, 1996 TAG: 9609270080
SECTION: VIRGINIA PAGE: B-4 EDITION: METRO
DATELINE: RICHMOND
SOURCE: Associated Press
Fail to pay your personal property tax and the local government can block your car license renewal, intercept your state income tax refund, garnishee your wages or seize your vehicle.
Those heavy-handed collection techniques speak volumes about why the tax should be eliminated and replaced with another revenue source, Manassas Treasurer Curtis Mlsna told state lawmakers Thursday.
``If we have to put that much effort into collection, I wonder if it is a tax we should levy at all,'' Mlsna said.
Members of a Senate Finance Committee panel seemed to agree, but they made it clear they would not eliminate the tax unless they can find an equitable way to replace the lost revenue for all local governments.
``We can't just leave the localities holding the bag,'' said Sen. Charles Colgan, D-Manassas and chairman of the subcommittee.
Colgan initiated the study because of complaints from constituents hit with huge tax bills, usually for expensive automobiles. Unlike other taxes that are paid a little at a time, the personal property tax generally must be paid in one lump sum. That can mean writing a check for nearly $1,000 for taxes on a $25,000 car.
``I'm not sure anyone expected personal property tax bills to ever become so large,'' said Mlsna. He said the tax ``should be replaced with something more citizen-sensitive.''
Colgan said one possibility is raising the state sales tax from 41/2 percent to 6 percent and sending the additional revenue to localities.
The tricky part would be devising a formula that would prevent any local government from losing money. Some local government officials were skeptical that could be done.
Connie Bawcum, Richmond's deputy city manager, said the solution would have to be more complicated than a flat statewide increase, because the amount of sales tax needed to replace personal property varies from one locality to another.
For example, she said, it would take an additional 3.1 cents in sales tax to replace personal property revenue in Rockingham County, but only 0.54 cents in Martinsville.
Bawcum agreed that the tax is unpopular, but she did not share Mlsna's enthusiasm for doing away with it. ``Unfortunately, local governments have been assigned the taxes people most love to hate - the real property tax and the personal property tax. We've learned to make the best of it,'' she said.
Localities get about 14 percent of their revenues, some $1.1 billion a year, from the personal property tax. The only larger revenue source is the real estate tax, 41.7 percent.
Automobiles account for 70 percent of the personal property tax revenue in cities, 77 percent in counties and 88 percent in towns. Business equipment also is taxed.
Stuart Ridgway, owner of a small recording studio in Falls Church, said the tax on businesses is unfair. Because his business requires expensive electronic equipment, he said, he pays a much higher tax than a professional who needs only a desk, a chair and a computer.
LENGTH: Medium: 62 linesby CNB