The Commissioner of Revenue provided his department’s annual report last night. Overall, the price of local housing seems to have stabilized. That’s good news. Single family prices are essentially flat, town house has gone up about 4% and condo’s have gone down 5%. Taken as a whole, pricing is up 3.1%. Residential housing comprises 57% of the real estate tax base. Foreclosures are down 60%.
Business license revenue is down an average of 15%. Revenue from the “hotel tax” is down 6%. Hell, even the cigarette tax is down 5%.
Tucked in there is another interesting number: the average real estate bill (not the rate or assesment) is now the same as it was in 2006. 3 of the 4 years in between then and now have had non-zero increases in CPI so revenues to the City are decreasing but our costs (except labor) are generally increasing.
Taken as a whole, this is somewhat encouraging. If we don’t get creamed too badly by the GA, we should be able to arrive at a budget in a reasonable fashion. That, however, is not a given. If the Governor and his allies are succesful in repealing the M&T tax (looks like HB 1636) and/or the BPOL tax (several) there will be a historic shift in tax burden to property owners – residential and commercial. We’ll need to watch our local representatives to see how they vote.
UPDATE: Here’s a link to the “Budget in Brief” that the manager puts out. Tells you where your tax money goes at a high level.
January 11, 2011 at 2:26 pm
The best news in that forecast is that foreclosures are down that much. Only once the foreclosure inventory dries up can values start rising enough to see fewer “short”sales and more folks getting out of being “upside down” in their mortgage enough to be able to refinance. If more people could refinance, more of our residents would have money in their pockets to spend elsewhere in the economy!
January 11, 2011 at 4:59 pm
Though, I think that is one of the issues that led to where we are now, people taking out second mortgages and going on a spending spree not to pay off bills or do home improvements, but just to spend, thinking home values were going to keep going up and up.
The sin taxes always amuse me. The Government wants us to stop smoking but always looks at cigarettes as a source of revenue.
January 11, 2011 at 5:34 pm
Remember what Senator Colgan said about the M&T Tax at City Legislative Lunch. No-go on killing it. Also, when I spoke at the Regional Hearing last week on Governor’s Budget, raised the point again.
M&T and BPOL are both backed by VaCO and VML with basically same wording. Having read some other locals’ agendas, seems a unified voice. I know Delegate Anderson is on board with supporting them as he told me last year when he supported ending them, he was not aware of the impact. Although not our House Delegate, he looks at the total area impact now.
January 11, 2011 at 5:41 pm
CoM,
Agree taking out a second mortgage to go on a spending spree is really dumb. What I hope to see though is values going up enough so that those of us who did nothing wrong other than to be buying at what turned out to be a “bad” time can get some relief from the currently historically low rates. I’ve been trying to refinance for near two years now, and unless I can scrape up $30-40k to dump into principle, until local values go up they just don’t want to talk to me. Sure, they’ll lock me in make me pay several hundred for an appraisal, but when I KNOW that appraisal isn’t going to reach the value they “need”, I would be foolish to throw away my money.
January 12, 2011 at 12:23 am
Dave,
I agree. We bought in 02 before the prices started to really sky rocket, but many of our neighbors are way under water. Shoot, I think we just back up to a level where we might make a few dollars if we sold today.
January 12, 2011 at 9:33 am
Andy, I thought about this overnight before I decided to go ahead and post it.
Your first two paragraphs are an excellent summary of the analysis – it paints a realistic picture of the fiscal situation the Council faces.
The third paragraph takes this off track. Yes, it is nice to say the average tax bill is the same as 2006 -but totally unrealistic to use in any shape, size or form. The BOCS & CXO are famous for using this line too, but then they turn around and jack up all the fees the County has.
People ask the question, and have said even last year in the hearings, if my bill is the same, then why all the cuts? Where is my money going? You do point out costs (minus labor) have gone up, as we all know even in our homes – just walk through the grocery store. And by the way, labor is a big chunck of costs, even with a salary increase freeze.
So I ask you to be the lead advocate to have the Council not to use the phrase “The average tax bill is the same as 2006”.
It is a nice statistical analysis, and if the same paints the picture (as some have said) that we should not have all the cuts.
I would also like to see a nice clear chart in the budget workup this year which shows the personnel/labor costs – to include benefits – so we all see to have a great, hardworking City Staff, it is a portion of what this “2006 average” pays for. When the County had their presentation on impacts of the Health Care Reform Law, the Wells Fargo people did a great breakout on cost impact of benefits. I still think something like that (and still availbale for viewing on the County website), should be presented to the Council and then Citizens can see what is faced by our Leadership.
January 12, 2011 at 11:34 am
Ray:
We’re going to have to agree to disagree on this.
The fact that average tax liability is the same now as it was in 2006 is gigantic and here’s why: it includes the fire levy. I’m mixing rate and bill here but 15.4 cents of the tax rate goes right to the fire department. So for the same amount of money (bill) that you paid in 2006, we also pay for the fire depatment which has around 50 employees. The value of a penny varies over the years but it’s around $400k. that’s about $5 million (very rough) a year that we were spending on general fund from real estate taxes in 2006 that is no longer there.
January 12, 2011 at 4:17 pm
During the last decade the value of real estate exploded and the amount of cash collected by the city more than doubled in a very short time.
I’m sure alot of people thought these values were going to stick with us for numerous reasons.
The bottom line is that it did not.
Now that amount of revenue ( from the temporary real estate spike) is not enough.
I have tried to look at the budget online and at over 90 pages, It just too much for the average person to understand.
I try to keep it simple.
I can only see it from my tax bills.
Less than $1800 a yr was adequate 9 yrs ago,
to $3600 4 or 5 years ago.
This tax season it was $3500, including over $300 FD levy.
I know nobody likes paying taxes, but I have to ask?
How can doubling my taxes in a few years not be enough?
As a citizen, I feel asking not to be treated as a
“bottomless piggy bank” is a reasonable request.
Difficult and unpopular cuts have to be made.
Thank You
January 12, 2011 at 9:30 pm
Andy, thank you. Now, keep that front and center, and I won’t find a reason to good naturally poke when that phrased is used.
It is that clear, logical description – without a lot of beancounter phrases – that makes someone see where the dollar is going. Sort of like Melissa Peacor’s “dollar slide” in her powerpoints where a $1.00 bill is divided showing what it is used for.
If something similar was used, it might in part answer questions like Bud presents as – aside from stuff we can grasp like Fleet Fuel has climbed in cost – where the average citizen can grab a snapshot.
Again, many thanks, my friend, for the expanded explanation!
January 13, 2011 at 7:18 am
I guess we are doing better than most.
http://www.msnbc.msn.com/id/41051419/ns/business-real_estate
January 13, 2011 at 7:51 am
But in 2006 Andy the FD was less then half the size it is now, and the budget for F&R was in total FAR less than you are being asked to fund now.
I think lumping the “same” comparison on the FD isn’t a fair comparison because the FD you have today is very unlike 5 years ago.
January 13, 2011 at 8:43 am
You’re right about that! The F&RD is a vastly different beastie now than it was then…:)
However, none of this is a comment on or criticism of the F&R. It is about the overall size of the budget. My point is that *including* the (larger and different) F&RD, the budget is still at 2006 levels.
That doesn’t say so much about F&RD but it hopefully gives folks some idea of the magnitude of the cuts we have made. Did anyone ever think we’d see a Manassas w/o a Parks and Rec. department? Even a small one? I didn’t.
January 13, 2011 at 8:44 am
@Ray Here you go: http://www.manassascity.org/DocumentView.aspx?DID=3451
January 16, 2011 at 1:38 pm
Too bad you can’t get dead beats to pay their taxes. I understand there are hard times for some folks. Give those folks a chance IF they can prove it! If someone cannot prove the “hard times” I say take HARD ACTION.
There is one house that I know of, the owner is too lazy to rent it and taxes haven’t been paid in over a year. No one living in it…I say send it to auction to get your money or have the homeowner pay up.
This particular situation just MAKES ME MADDER THAN A HORNET. I’m picking up the tab for this dirt bag not paying his taxes on ANY property he owns in the COM.
January 16, 2011 at 2:18 pm
Good point raised about deadbeat taxpayers. Part of the issue for the City, as I understand it, has been Virginia law has so many stipulations, you can fight in court almost forever over it.
Fortunately, with tough times for localities all around, the GA has taken up a bill this year to empower localities in tax collection to include the personal property tax. For that tax, it would reduce from six months to three months before the sheriff comes a’knockin with the papers.