Wednesday, April 9, 2008

Chesterfield Reduces Property Tax Rate by 2 cents

Today the entire Board of Supervisors of Chesterfield County voted in favor of a property tax rate reduction of 2 cents to 95 cents. This marks the second consecutive rate reduction approved by the County, however this time around it appear to be a walk in the park compared to last years heated debate over the reduction.

What has changed? Everything apparently to the current Board, which evidently thought it more prudent to keep campaign promises on this issue than to actually look at the economic ramifications of such measures with regard to the health of the County budget moving forward. It is apparent these these Supervisors have managed to miss to constant barage of negative economic data coming out recently and while announcing some new business development news fail to have any answers for such conditions in the economy that caused say the Hon Company which operated in the Bermuda District for many years to close up shop taking roughly one thousand jobs with it out of Chesterfield. There seems to be a quasi-state of denial concerning some of the real hard economic indicators on the horizon.

The Board seems content with the knowledge that Chesterfield is still a place where developers wish to bring to market new home and commercial construction and seem to feel that they can raise the level of which those markets particpate in revenue generation which has roughly been around twenty percent in recent years. But at what price is the level of servcies going to pay by reducing the rate yet again, especially since many Virginia localities are raising these rates to offset infrastructures needs.

Does this Board really think that Chesterfield will get a good share of State funding? The power is shifting even more to Northern Virginia in the General Assembly and while Chesterfield is one of the fastest growing areas in the Commonwealth, its needs will surely not be as high on the list as say NVA or Hampton Roads/VA Beach.

Chesterfield needs to begin the process of looking after itself. Yes that will certainly be painful, but Henrico County has managed to get by without State funding for roads. Why can't Chesterfield do the same? Reducing the rate is an easy political move, yet many of us put this Board in place to kake the hard choices and not the easy ones. Every issue raised last year as to why the rate should not be reduced is even clearer in todays economic conditions.

The fact is it was not the rate per say people took issue with but the level of increased assessments. The assessments which increased some 16% last year and now 11% this year have been the overriding factor bringing about the issue regarding tax rates. It was never the rate so much as the assessments were raised so to were the amounts residents tax bills became. While it may be politically expedient to lower rates now, it begs the question just what the County has in store for us come 2009 with regard to tax assessments? What if the housing crisis really gets worse and home sales and values continue the declines we have witnessed beginning late last year? If homes lose twenty percent of value when compared to 2007 assessments what will be the impact or fallout if residents find the value of the homes declining in the marketplace but he assessments rising in 2009. What is the likelihood of such scenario? Hard to tell but no one really knows how deep this housing crisis will go and whether the bottom will hit in 2008 or later.

Personally I am pieved at this move. I did not support the reduction last year because I wanted to rate to remain the same but if they felt a reduction was possible they should have taken that reduction rate and set that percentage aside for roads and only for roads. It now so happens we have lost some nine cents in revenue now that could have been marked for roads if you take into account the previous reduction.

Who will be impacted most? Schools of course. The mismanaged growth or as the blog Bacons Rebellion says "dysfunctional" growth has brought us such impacts as overcrowding in our schools and now it is apparent that these reductions will effect the School Board as well. I feel that we may see a battle in the coming years, not unlike the City of Richmond between their School Board and Mayor Wilder, should this Board of Supervisors not begin to engage and work with our School Board more openly. Its is striking to me as some of these Supervisors act as if the situation with our schools and overcrowding is somehow a new phenomenom when I actually had classes some thirty years ago at Robious Middle School in trailers out back. It begs the question just how long some of these folks have been residents of Chesterfield if they cannot grasp the reality that many of us not only were educated here in Chesterfield but are now raising our children here----for now.

I wonder just how all the new residential developments before this Board will impact property values in the older areas as well going forward if the available home inventory rises as a direct result of the number of new homes constructed in the market. This Board has not yet been inclined to put forth a solution for sprawl or a revitilization plan for many areas of the County that have been impacted by the western migration of residents along Rt 60 and 360 other than the Cloverleaf Mall project. In case they missed it, our Villages, are quickly being challenged on all sides with increased developmental pressure which will result in them losing the Village charm altogether.

Regardless of the level of assessments and the underlying revenue generation that results from the rate in 2008, the Board continues to miss the opportunity of pulling the County up ahead of the curve and make some significant moves that would benefit the entire County for years to come.


John said...

Should the economy really sow down and business development slow as well the County come 2010 will see itself facing rising property tax rates.
The County has seen itself to decrease the burden on residents but has have yet determined to increase fees to the business community or developers. many localities have seen fit to do this as well as raise the tax rates; Loudon, Fairfax, Stafford are in the midst of their road dilemmas requiring additional budgetary concerns where Chesterfield is just entering the early stages. Northern Virginia is a good example as to what will happen here if the County loses sight of the big picture.

Alter of Freedom said...

I understand the political logic behind the reduction. It will be spun by those who support it as a measure to help residents lower expenses during such a slowdown and on the surface may seem to help people but in reality if our roads cannot be fixed, if our schools keep adding students and our economic development apparatus in the County keeps seeking more people to relocate to Chesterfield and is spending tax money to do so then in the long run with an increasing population and continued flight from the City, though slower last year, the COunty will face serious issues and not have the revenues to address them.
John, you are accurate in the portrayal of what NOVA has experienced. They got behind and have never been able to catch up even with increased State funding. Chesterfield faces similar obstacles that were faced in NOVA twenty years ago going into today and the situational impacts such explosive growth has brought.
I have to admit I was surprised by the reduction and had believed the would remain stable for at least 2008 upon which then the Board would have an opportunity to review the economy as well as the assessment picture clearer before making a judgement to reduce the rate.

Mike Lanksky said...

The problem is twofold.

One-Their was a lack of discipline in past years as the housing boom increased prices. Both the County and CCPS have budgets full of fat.
Look at CCPS-The core administrators are paid more than Henrico even before the fat post retirement health benefits. Look at Cosby and Tomahawk schools-virtual country clubs. The CCPS has has weak financial controls as they cannot track whether some vendors have been paid twice.

Second-The rate of growth of real estate taxes cannot be sustained.Peeople will get taxed out of their homes.

Lets let Gecker and Holland get control of the budget first. Then we can go after the reforms mentioned.

Alter of Freedom said...

While I can see your points Mike, I just feel the biggest hurdle is a lack of cooperation between the CCPS/SB and the Board of Supervisors/Planning Commission.
Take your point about Cosby. Cosby is a wonderful modern schools with all the bells and whistles to be sure but my basic arguements the lats few years has been that the County should be spending less on such b&w and more on the land in terms of square footage. Though Cosby is a great school it too will be overcrowded once the new subdivisions continue to come on line and this was my point years ago. The Board as known all along that Otterdale and Western 360 was to be developed immensely and yet they made no provision in the future to be able to add/expand Cosby over having to build another High school from the ground up. High Schools offer a very different dynamic because of the space required for athletic fields and such but our elementary and middle schools do not require much in this manner and in fact these fields are used more by County recreational clubs than by students participating in school activities. Extra land would come in handy when it is time to add/expand these schools over the continued addition of the dreaded trailers.
By also having the ability for expansion you also have a chance to mitigate any "redistricting"issues that may arise like over the Tomahawk plans.

As to taxes. It is a question of left hand/ right hand syndrome by local government. We want to attract more and more residents and use our economic development department to do just that and then plan for them after they get here and not before. Chesterfield while being the fourth largest locality has a tax rate that does not even come close to the other three areas growing faster. The COunty is a much better place to live and raise children than say the City of Richmond and yet look at the tax rate differential. Its a matter of return of investment in my mind. What are our taxes giving back to us? How much are we spending on schools? On Police/EMS/Fire? On roads ? And then how much on our local government infrastrcuture? Look at the City for this one and the Schools-they have lessstudents enrolled with more real estate (schools) and a much larger bueracracy to support those students than Chesterfield and delivering at much lower rate of return in testing/scoring and graduation rates. Chesterfield currently graduates some 88% of those students who enter as freshman. The City is like 60%. MY fear is the size of our County bueracracy may be growing to large as well or at least in the wrong areas.
I agree with regard to the budget. Our focus should be on maintaining/rewarding our police/fire and teachers with above average pay--all of which lag a bit behind other localities in Virginia or at least we should get creative and let our Police/Fire/Educators get a siginificant property tax or real estate tax break on a yearly basis as incentive for remaining employed in the County.
I also think that our retired citizens who wish to volunteer at our Schools or other areas of County related affairs could be given this break as well.
We elected these new Board members to think out of the box and I just have not seen that as of yet. Its early and I am not pushing any panic buttons but would like to see more than the same tired language with regard to why we cant get things done.

Will said...

Alter states, "We want to attract more and more residents and use our economic development department to do just that and then plan for them after they get here and not before."

On exactly what do you base that statement? What evidence do you have that the economic development department is being used to attract more residents?

Alter of Freedom said...

The role of the Economic Department or in fact its very mission along with the CEDA is to recruit and attain new and expanding business entities to Chesterfield. The goal is to create new jobs by way of attracting new business development to the County as well as expand the tax base of the County by working to bring new companies like the recent announcement of ACE Recycling relocating to Chester. This will result in individuals who relocate, mostly management positions when these relocations of business or expansions to new markets take place and of course new jobs that certainly will need to be filled. It would be great if they were filled by existing residents but all too often, and the growth rate bears this out, that new residents arrive in the County along the same lines as the growth of new business.
Look at the West End with the relocation of Northeast operations of Phillip Morris and the hundreds of employees who have and are transferring to the Richmond area.
The point is as the business expansion continues and new business starts create new jobs at a rapid pace requiring in some instances specialized workforces all too often people come in from outside the County. I am not saying this is a bad thing at all but that as this takes place and residential growth rate continues to climb each year the County will be strecthed to keep up with the level of services without straining the governmental infrastructure. An example is we will require additional Police and yet we are at a critical time with regard to retention versus pay as many are leaving Chesterfield for other Virginia departments and our educators as well have many closing in on retirement and will need to be replaced in the upcoming years as well as finding additional educators for the newly planned schools on the horizon.
Economic Development plays a key role in attracting more business to Chesterfield and with that more people into the County. If this were not the case Economic Development would not have such things as Relocation Services.
There is no dispute that wherever you see new jobs being created or new economic activity or development on such levels you see and increase in the growth of population.
If you are not of the same opinion, lets talk in five years after Watkins Centre goes up on RT. 60/288 and see what happens to the population of Powhatan County bordering the development which has considerable less tax base. The homes are already beeing built there to accomodate those who will move there, but the differecne is I doubt Powhatan will be spending very much to get those residents as it will piggy-back what measures Chesterfield has undergone with regard to Watkins Centre.

Anonymous said...

Alter's points are well spoken. The Board's measure while on the surface appears to be delivering us with less taxes has managed to erode the School Board budget by 6+million dollars which will result in that body having to cut services, most likely in the area of security and counseling or even freezing hiring of new educators which will place more students per teacher ratios going forward.
For all those who demanded such an ill advised reduction, take solace in the fact you are contributing to even lesser quality of life here and not greater.

Will said...

Interesting points you made regarding economic development. Perhaps it's time that whole program be examined. The nearly $2 million per year being spent on economic development might be better used for schools or police or transportation. Certainly the nearly $200,000 per year being paid to the Director of the department should be questioned.

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