One of the more surprising developments that I’ve experienced during my time on Council is the trouble that the state government can cause for local governments. I don’t believe that the state government and the General Assembly (GA) are actually hostile to local governments but they can and do cause serious problems for the locals. Sometimes these problems are the result of changes made by the GA for the greater good of the state. Other times they can be the result of changing political priorities.
When these two kinds of changes try to happen all at once, bad things usually happen.
The first one of these that I can remember is the elimination of the car tax. Despite what you may believe, the car tax was never really eliminated. It was just renamed. The City reduced what it collected through the car tax but the state sends us a check for the difference. Where do you suppose that money comes from? You and me, that’s who. The deal between the state and the localities was that if the localities reduced their take through the car tax, the state would make them whole. This worked for awhile until it started to cost the state too much and they capped the amount of “wholeness” they would send to the localities.
In Manassas, we are now on the horns of another set of competing priorities. The GA is discussing the elimination of the “Machinery and Tools” tax. This is being done to make the state more “business friendly”. I will not offer judgments on that priority but I would note that this will cost the City of Manassas $5 million dollars a year when this tax disappears. Of course, when the GA decides that this is best for the state, they have probably studied this and I, for one, want to support that priority. After all, a rising tide lifts all boats but the cold hard truth is that, for Manassas, the resulting hole in our budget will have to be filled somehow. $5million represents 10% of the City’s budget. That is quite a lot.
I think the GA needs to take a long hard look at revenue sourcing and the diversity of that sourcing to make our cities and counties more competitive with other states and Cities. Perhaps the elimination of these different taxes should not be our priority. Perhaps we should reduce some taxes and modify other taxes to lighten and spread the load. I am sure that those industries who pay lots into the Machinery and Tools tax would like to see it eliminated but if it were cut in half, that would probably be an enormous help….
February 13, 2008 at 11:35 am
Samuelson in today’s Wapo op/ed section:
“Budgets are not just numbers. They express political choices. What
should government do and who should pay? The reigning philosophy,
practiced by both parties, and largely approved by the public, is to
evade choices.”
Well. sorta, the Richmond Rascals have chosen to cut taxes – local
taxes. It is a win-win for them – they can campaign as “tax cutters”
while not having to make the tough unpopular spendings cuts that
will result. Plus, they will increase mandates on local governments,
but cut funding, another win-win for them, but an action that will
hurt many vital programs. The Gov. and GA evade honest choices
at the expense of local governments and the citizens of Virginia.
(This is like the Manassas City Council mandating Wellington’s HOA
cut their fees while, at the same time, demanding they pick up the
cost of Round School).
May I suggest, our representatives cut the STATE income tax (Florida
doesn’t even have one) and leave counties and cities to make their
own decisions based on the desires of their citizens for local spending
and taxes.