I don’t usually do this but let me start off by stressing that this is my opinion only. If you don’t like something here, take it out on me: these are my thoughts and mine alone.
When we started the budget last year (Fall 2009), the City Manager told me, “next years budget will be worse”. I thought he was nuts – we had just laid off a bunch of people, closed Parks and Rec and cut millions from the budget. I took a lot of that pretty personal. I knew many of those we laid off and finding a job in this environment can be a challenge.
Unfortunately, I now believe that the Manager might be right – the next budget could be worse and here’s why:
For the past 3 (?) years, residential home values have fallen sharply and, every year, the Council has increased the tax rate to keep residential tax bills close to even and this year slightly lower (on average). In some years, the increase to the rate was ~25%. This is important because commercial property owners are taxed at the same rate as residential property owners.
Here’s the squeeze play: commercial property values haven’t fallen much if at all. So, while your average residential tax bill oscillated around a static amount, the actual taxes (not the rate, actual dollars) that commercial property owners pay have gone through the roof increasing 20% or more a year. Up till now, those owners have shouldered the burden without much complaint. I heard from them occasionally but they weren’t real wound up. This year is different – I’m hearing it loud and clear now and not just from the anti-tax crowd. I’m hearing from folks who shoulder the burden without complaint because they like Manassas the way it is. They are hurting and, at some point, taxes like that make our businesses less competitive than their peers elsewhere. That is why this years budget process will be at least somewhat different than years past where the primary concern was the impact to residential rate payers.
This year will be about the effect of the rate on commercial property owners – in my view, we can’t increase taxes on commercial rate payers in any substantive way and residential bills will have to remain static. So, here is the end game – if both residential and commercial values will stay even we will be fine. If residential values go up some (not too much!) so we can cut the rate, we will also be fine. The squeeze play will come to pass if residential values fall and commercial values are even close to static. In that scenario we are stuck as we don’t have much room to increase the rate again. The City will have to absorb that loss and it could be substantial. Remember that 58% of that loss will fall upon the schools….
One closing note: Much of the preceding is based on averages and abstractions. I do know that some individual bills have gone up but I’m trying to convey a point so give me a little leeway here….:)
May 31, 2009 at 5:00 pm
State code prohibits a different rate for commercial versus residential, right?
I can’t imagine residential assessments holding where they are, I know in my neighborhood (Clover Hill) assessments are probably 10-20% over market value on non-foreclosure properties, and realty web sites say Manassas “values” are dropping faster than the averages. Could really get ugly if the foreclosure inventory doesn’t clear out over the summer.
May 31, 2009 at 9:33 pm
Not to be flip here Andy, but I suppose those of us that are “anti-tax” have been barking up the wrong tree with you? Because it seems by your statement, you’ve not really taken that opinion to heart until recently.
I know we must sound like a broken record at times, but this scenario as you have laid it out, seems to back up our opinion that high taxes are not a positive for the City.
June 1, 2009 at 5:30 am
COM:
Point is that when someone changes their tune on something that is important to them, it makes an impression on others. It’s human nature.
On the tax issue, I would point out that if I didn’t believe lower taxes were important I would have taken the MUCH easier path and voted for higher taxes instead of laying people off. Go back and look at some of my blog posts from then – that wasn’t easy for me….
June 1, 2009 at 12:16 pm
Andy,
Manassas is very fortunate to have such a strong industrial and business base. Very few small cities like ours have such a healthy industrial sector helping to prop-up the residential sector. Low taxes are great – but shifting the tax burden from residences to businesses only serves to push the businesses out of town, raising taxes on families in the long-run. Perhaps we should speak to our state legislators about getting some sort of waiver from state law. It seems silly to be forced to keep the tax rates the same when property values are so divergent.
The City Council is doing a great job balancing the needs of different constituencies in a very difficult environment.
June 1, 2009 at 12:41 pm
I echo Andy’s thoughts. The other thing that has put the squeeze on the City from a revenue perspective is the decline in non-property tax revenues (meals, sales, BPOL, etc). No one wants higher taxes. But I also don’t see anyone lining up for cuts in services. Fewer cops, poorly maintained streets and the like aren’t an option. Further, to cut services would likely increase the deflation in property values and drive folks from the City. In short, we are in a tough spot. Short-term we’ll need to manage through as best we can. Any suggestions from the public are definitely welcome. We need to hope that residential values show an uptick by year end and that commercial values hold flat. In a longer term perspective, the answer is in increased commercial revenue from development at the airport and Manassas Landing. That will add to the total revenue pot and take some burden from the residential side.
As for a waiver or change to the state property tax regs, that is a non-starter. First, equality in tax rate is in the state constitution so your are looking at a constitutional amendment. Thats not happening! Second, the rule is there to prevent funny games with the taxes. A very good reason that most floks would agree with. From the Richmond perspective (and I have spoken to several legislators on this) we have an unusual, short term issue that doesn’t warrant this type of change.
June 1, 2009 at 4:21 pm
Andy,
I’m glad that you recognize the potential issues that are facing the City next year and beyond. Just looking at today is fine, but as you pointed out, there are issues that are right around the corner that also need to be looked at now, in hopes of avoiding them.
Lower taxes is not just a rally cry, but a sound economic policy for both the home owner and the business owner.
We need to hope folks come back and, or, continue to shop and eat in Old Town. Hopefully this weekend’s weather will be good for the train show.
Also, you may not be able to answer this, but I’ll ask anyway. There has been persistent rumors that an Outback steak house was going to open in the City, specifically in the shopping center at the corner of Grant and Wellington. Has that been put on hold, never a possibility, or still in the plans?
June 1, 2009 at 7:42 pm
I have never heard about an outback in the City….
June 2, 2009 at 6:48 am
OK, thanks.
June 2, 2009 at 9:25 pm
We’ll have a new place to eat at soon. O’Meara’s was sold and will reopen as Center Street Grill. Hopefully, it won’t turn into a downtown wannabe dance club on Friday and Saturday nights.
June 2, 2009 at 10:53 pm
Mark, you asked in your comment for a citizen’s suggestion and here’s one:
Take a look at Manassas Park’s public comment on the Shared Services Agreement for Library Services. It is up on their website and shows a nice breakout they got from PWC Library System on which libraries the MP residents are using. They got hit with a $558,730 bill.
As you and Andy and the rest of the Council know, I am a big advocate for the City to look at what is under that agreement and what we are paying versus any actual benefits. My other favorite target is Virginia Cooperative Extension – our City coughed up about $100,000 to them, and all I or several others can figure out is there is only about $20K of real services used.
Of course, I have a personal agenda in that Shared Services Agreement when it comes to the Human Services portion, but I think the City ought to be like MP and take a hard look at the Library Services. To me, getting billed for over half a mil is a heck of a library fine for overdue books 🙂
June 3, 2009 at 11:27 am
AHHH! Don’t touch the public library! I practically lived there when my kids were young. It’s the last great “free” service for people who can’t afford computers, CDs, magazines, newspapers, books, etc. You can even trade coupons there and buy books for 25 cents. SummerQuest, educational programs…don’t get me started. I want my taxes to go to the libraries and schools whether or not I use them — they grow the next generation.
Same with Virginia Cooperative Extension. The Master Gardeners will come to your home, give you free advice on anything, and they line up after the farmers market to take any donated produce to SERVE and encourage Plant a Row for the Hungry. The 4-Hers practically run the county fair — the largest county fair in the state of Virginia, and have year round activities — they are a mainstay for many of the homeschooling families to stay connected and do activities. The STEP program — systematic training for effective parenting — is invaluable for helping families who are struggling with issues, and they do it age-specific. So many resources.
Bad Ray!
June 3, 2009 at 12:57 pm
Off topic, but FYI the Council interviews start tonight at City Hall 7PM.
The order, to my current knowledge, will be Dora Brooks, Dave Core,
Robyn Williams, Bruce Gross and Audrey Sensale. Tomorrow night
it is slated to be John Myers, Sheryl Bass, Sanford Williams and
Robert Schilpp (Julie Cochran has withdrawn her application).
Hopefully, this process will be televised and , of course, it is
open to the public. Each interview should last around twenty minutes.
June 3, 2009 at 2:37 pm
Did all of these empty houses not have children in them? Do we STILL have the same number of kids in the schools?
But hold your hats…OBAMA now wants those of us who are fortunate enough to have health care insurance available through our employers to pay taxes on that benefit.
2000 $$$$ earned 1/2$ health care $ taxes
2010 $$$ earned $health care $$ taxes…..WOW
Did Teachers or City employees get increases, either COLA or Merit? How about not giving those out for at least 1 year? Both my spouse and I have gone over 4 years without one…however, all other costs have gone up!
June 3, 2009 at 3:13 pm
Dear WSGFN-
Can’t speak to empty houses but MCPS enrollment actualy continues to climb. That of course puts pressure on the schools.
The City and MCPS did not hand oot merit or COLA increases this year.
June 3, 2009 at 10:34 pm
Once more on Shared Services, and yes, Cindy I am being bad. My arguement is not funding the libraries and the Coop Extension, just take a look at what we are paying for.
Let’s look back at the history of the Library System first: The Shared Services agreement was signed back in April 1976, and the County agreeded to provide “library services to the citizens of Manassas on the same basis as it provides such services to citizens of the County”….and the City pays on a per capitia basis. That be, if anyone reading is unsure, a fixed percentage billed from the County each year based on the total number of residents.
But again, I urge to look at Manassas Park’s website to see their Public Announcement on the Library issue. My kids, like yours Cindy, spent time at the library on Mathis Avenue. Occasionally, and more by me lately by visiting RELIC, the Bull Run Library got used. I personally have never visited the others beyond my two “neighborhood” ones, and I suspect since the Library System totes the phrase “your neighborhood library” in their general information, that is the intent of the Agreement.
Personally though, when the County was talking of building two new ones to house an antique car and an old, historic building – that starts to cross the line in my book. Are we going to pay for facilities no City resident ever sets foot in for regular use? Read that as I believe when it comes to the Libraries, it ought to be paid on a basis of “pay for where City Residents go”, plus maybe the standard of 8% for overhead/administration.
Now as for VCE, they do a lot of good work. Cindy, I agree with you on 4-H as by and large, that is an effective and cost efficient program. By the County’s budget book, it is only costing about $20 a child. And I am a big fan of the Rainbow Center since it offers a theraputic riding program (although I wish they would extend it to include older people with disabilites and even our aged residents with disabilities brought on as they got older.
I do have difficulty with the rest of the VCE. I was invited by Mr. Stirrup’s Budget Committee Chair to a meeting back in February this year at Mr. Stirrup’s Office. In that meeting were the Extension Agent and the Financial Education Program Manager. Among the many things I pointed out was the lack of public relations on their part – yes, I can place a call and have a Master Gardener come out, but where are events/activities sponsored by them in the City?
Case in point: in our fearless local rag it was published last week under the heading of “Manassas/Manassas Park Events” that the VCE would be holding a class on pruning azaleas and other flowering plants. Nice I thought until I read it was at Chinn Library!!!! So much for a local event.
The point – to end my ramblng is – that maybe in searching for a way to save dollars in one location is to review what expenses exist to ENSURE the services are benefitial to a specific population (i.e. Aging) and that we pay for services which City residents actually use. Yes, it will lower the allocation, and seem more like a contracted service, but hey, we do that already with the Community Services Board.
So just more things to ponder….
June 3, 2009 at 10:59 pm
Good to see you at the public hearing tonight, Ray (and great to see a full council chamber).
A Virginia Cooperative Extension spot just played on cable this evening. The parenting classes are advertised through the schools and juvenile justice system. 4-H sends me fundraising mailers. They do plenty of grassroots PR where they need to.
I have no problem using the entire public library system — Chinn is a good meeting place when you’re from Manassas but you want to meet with someone from Dale City or Woodbridge. Bull Run offers two different meetings for writers who come from Manassas, the county and other jurisdictions.
You have to stop thinking this is mine, I live in Manassas, that’s yours, you live in the county. Like Bruce Gross was saying tonight, we have Freedom Aquatics and Fitness Center because we partnered. We will have a major arts/performance center, because we partnered. You like the things we’ve been doing in the city neighborhoods as volunteers — half my training came from the county, from GMU, and from the county neighborhood conference and the county neighborhood leaders group. And this weekend I go to a workshop in Belmont, in PWC – free. We should all be both sharing — and giving back without a mind to this is city and that’s county.
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March 13, 2010 at 2:38 am
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