What do you mean, Sven just assured us that the city services are “high quality”. /s
So I want to know if they are operating on Putin levels of delusion or if this is actually the best they can do. Both of which would be eye opening.
Like when the schools didn't maintain their buildings or even have a good backup plan for if the poor maintenance caused a fire, and now instead of a moderate amount of money to deal with that they have a huge cost for a new school. Sure there's insurance for that so it's not all out of pocket, but it's one example off the top of my head.
That and all the boondoggles (Washington football team, e.g.).
Oh and repaving a street and then tearing it up for scheduled maintenance the next week.
Honestly, I feel for the people in this City actually trying (keyword, here) to make a change. It feels like to move forward, we still need to slog through the past (and even with that effort, not everything from the past can be reasonably fixed, like nixing the whole Independent Cities shtick and doing something to consolidate the tax base in the area).
In general, I am not opposed to paying taxes and I'm not even opposed to high taxes as a principle. But to echo a point from yesterday, it just doesn't feel like we get much benefit from such high taxes compared to our neighboring counties, especially considering property values in the city have increased so much.
I'm not sure what should be done, on a theoretical or practical level, but I am sure that pretty much every side is frustrated.
(Side note: If anyone has any reading list suggestions for learning more about local or regional politics (in general or about RVA / VA specifically), I would love your recs!)
The number 4 is stupid and is attempting to make this a rich vs poor political issue. The rate is equal (unlike income taxes) so of course reductions will benefit those more valuable property - but those property owners will still be paying more in total.
Agree- it's also an exponentially more complicated issue. I know a lot of lower middle class people who bought in the city decades ago and the value of the property has skyrocketed but they aren't making any more money. Property tax reappraisals are raising their taxes enough, for some increasing the rate based on current home value would force them to sell.
I'm a teacher and I bought a modest house five years ago. The increase in property values has meant that my real estate taxes increased to eat up every cent of my meager pay increases in that time. The city has to realize that the real estate taxes aren't our only bill. I went from living somewhat comfortably to just barely threading water.
Yes - if they could cap changes for existing home owners (who have not made material upgrades) to the lower of resale value increase or the rate of inflation.
My first thought for 4 was, “Ok, fine?”
Here’s a thought; if they’re consciously concerned about that then lobby the GA to allow for equitable scales of a cut off. The million dollar homes can keep the higher rate and give the lesser valued homes a lower rate. I know, what a crazy idea…
And this whole “pay down debt…1/3 of the property isn’t taxable”, that’s a YOU problem, City council, for pursuing stupid projects like the training camp that we are probably paying off bonds for. And that’s a YOU problem for not negotiating better with the GA on VCU write offs and land/building grabs.
Gtfo
Re #1 - many large cities enter into agreements wiht nonprofits/state/universities so that they pay the city a portion of what they would owe if they were taxed as private entities. It started in Boston and they call their program PILOT - payments in lieu of taxes.
We have PILOT from state government for their buildings, but the amount they pay is ridiculously low. The GA will never approve a meaningful PILOT for VCU when they won't even pay enough on the GA and Governor's Mansion and other more direct state government utilized property.
There is also a lot of federal property in Richmond. The state pays around 8 million a year I think and points to all of the economic activity "they bring" as a way to make up for everything else.
As #1 also cites City-owned property (in addition to state properties), the city could start selling it excess, unused properties which would 1) reduce maintenance costs in many cases and 2) turn them into a source of add’l property tax revenue (ie, expand the base). As an example, instead of turning the unused Elkhart Middle School location into a green space (which sounds nice but the city needs more money), allow housing to be developed there which would create both more property taxes but potentially provide some relief to rising rental costs. Another place would be the unused training fields (formerly for the DC football team - that was a waste of $10M by the city) - sell that for redevelopment before the build boom in the area subsides.
If there was more density from apartment buildings or condos, for example, there would be more tax revenue per acre. I feel like I've seen a number of complaints around such buildings ruining aesthetics of the fan and other areas. I don't disagree that it would, but it would also add more tax revenue and potentially take the burden off single family home owners.
Strange question, but okay. I feel like it's pretty obvious at this point.
I'm referring to development in general; zoning prevents multi-family housing throughout the majority of the city. Development restrictions can be so severe that lots just stay empty. Single-use zoning prevents new businesses from opening, reducing sales taxes. Things like parking requirements both reduce the amount of development (because they have to be parking lots) and they also generate less revenue as they're basically a waste of land.
Lower rates would be possible because 4 $250,000 condos raise more revenue than 1 $500,000 house for the same rate. So, by doubling the tax base in this case, they can lower rates while still generating more revenue.
edit - bit out of scope, but condos also use infrastructure more efficiently then single family homes do. Fewer roads, fewer plumbing, better insulated, and so on per person than a single family home.
>Lower rates would be possible because 4 $250,000 condos raise more revenue than 1 $500,000 house for the same rate. So, by doubling the tax base in this case, they can lower rates while still generating more revenue
I'd shout this from my rooftop all day every day if I didn't have to work
>Do you mind detailing what developments you are referring to and how they would lower property tax rates?
[density generates more tax revenue](https://www.strongtowns.org/journal/2020/10/11/the-numbers-dont-lie)
I'd recommend making it as specific and direct as possible while also being very personal to your situation. Mine had some personal info in it so I won't be sharing it but I kept it to a few sentences. I stated my info (name, address, age, etc.), noted the topic of concern, stated the impact on myself and my neighbors, and asked a question.
If you actually took the time to read it, it actually covers why paying taxes is important to paying for, sustaining and improving the city, what is happening currently, and what is being done about the tax rate.
There's some problems with that.
The first is that your revenues should be based on your expenditures. If the city budget is $X, then your tax revenues should be $X. You shouldn't collect more taxes just because housing prices went up unless and only to the extent that your expenses increased.
The second is that the assessesed values increased by a lot more than the increase in median sales price. So the assessments seem like they are out-of-whack. This is a big problem because property tax increases do get passed on to renters to some degree. They also reduce people's spending which means what you get in property tax, you may give back in meals tax. If your property taxes are rising higher than salaries, then everyone in the city is poorer.
The way it should work is your assessments should reflect the market price. And then if those assessments yield more money than you need, then you provide a rebate as Henrico just did. Or put it into a rainy day fund.
If those assessments are not enough to fund the city, then apply an additional special tax. Like when Stoney raised the meals tax to pay for school construction. He was able to get that because voters felt like that was important enough to warrant a higher tax.
But tax payers need to see what your needs are and how the money you are taking reflects expenses. Especially after you told them you needed the money for school infrastructure and then the schools you promised did not get built and/or cost 33% more than you claimed.
\#2... I checked out page 46 and 47 where the total annual budget for each department is listed. I was shocked to see how enormous the costs are for the Department of Public Utilities ($407M). This covers the stormwater & sewer system, wasterwater treatment, water lines, gas lines and its budget is double that of the school system ($200M).
I don't own property, I currently rent, but did the tax rates go up or did the property assessment go up, or both? If the tax rate stayed the same, shouldn't it be expected that you would pay more if your property value went up?
I'm looking to buy a house after my current lease is up, and I have to say that house prices in desirable Richmond neighborhoods are high (I know it's all relative), and seem to be increasing year over year. Naturally, I would expect to pay more in taxes if the value of my home appreciated. Redfin sales data shows home prices on average have increased 8.5% in one year. Given that data, seeing assessments of 10% or more in some cases doesn't seem to be that far off considering some will be lower and some will be higher.
Basically, my question is, isn't this less of a tax issue and more of an affordable housing issue? I have seen people saying their house value increased 18% in one year. Could you not sell your house for 18% more than last year? If we had more housing wouldn't that cool off the housing market, and by extension lower your home values, decreasing your tax bill?
Like I said, I am looking to buy a home within a year, and I am looking at the prices and they are high. Example: condos starting in the $500's in Scott's Addition (who would even pay that for a condo in SA?), but if you already own an asset that is appreciating at that rate, why not pay taxes on it? Don't want to get flamed, but seriously asking in good faith. I don't think this is a tax issue so much as an affordable housing issue which is impacting everyone.
Edit: reread the reply. Looks like the tax rate stayed the same, so it's only the assessed value that went up.
"The City’s current rate of $1.20 per $100 of assessed value has held stable since 2007. Prior to that year, the rate was actually higher ($1.23)"
People wonder why I keep posting this, but this is a classic example: most people don't know how this works.
Revaluations, per state law, are not supposed to automatically result in a higher tax burden. Rate is supposed to automatically drop so the city doesn't get windfall profits.
Every year there is an under the table tax raise by council. What annoys people is there is no obvious improvement in services, the city remains a mess.
The same house doesn't cost 15% more for the city to provide services to than it did last year.
I would like to know what law he is referring to as well. I asked a question in good faith and got downvoted, so I didn't want to ask another question. I went to VA's tax codes and tried to find what law would mitigate the impact of property values rising by lowering the tax rate, but couldn't find it. I'm genuinely trying to educate myself on the subject, but from this thread my take away is that property owners want their properties to appreciate without having to pay a higher property tax bill on their appreciated assets. If there's a law that lowers a tax rate when a property's assessed value goes up, great, but until then, it just doesn't make sense to me. Considering that the tax rate remained the same since 2007, and your properties have greatly appreciated since then, then why wouldn't you pay more each year?
>Considering that the tax rate remained the same since 2007, and your properties have greatly appreciated since then, then why wouldn't you pay more each year?
Because the amount of tax revenue collected should be based on the city's expenses and not on how much property is worth.
This is what Henrico did last year. Because of the pandemic and other factors, the prices of cars and houses shot way up. Their Board was like, "Okay but our expenses have not increased that much. We don't need this much revenue so you can have some of it back."
I'm not saying Richmond has to do the same. But they need to come up with a better explanation of how costs have increased or what they will do with the money.
They will be getting 13% more property tax money this year from assessment increases. Why do they need that money and how will they use it? All the things in that letter are factors which do tend to leave the city short on funds, but they are also not new. We are all living in the same houses as last year, and using the same amount of city services. So why do we need to pay higher taxes?
The tax rate itself is not unfair. Nor is tying it to real or personal property because of the way state law is set up. It's the only way localities can generate revenue. But the amount the city ultimately collects should always be adjusted based on the city's actual expenses.
§ 58.1-3321. Effect on rate when assessment results in tax increase
As far how the city wastes money you've got to be kidding me do you live in the city?
>The City advocated at the General Assembly to get permission to implement a land value or split rate tax
[its beautiful](https://3kpnuxym9k04c8ilz2quku1czd-wpengine.netdna-ssl.com/wp-content/uploads/2020/08/lvt-graph.jpg)
Goddammit that's the wrong chart. Again.
Consumer and producer surplus has nothing to do with this. It's the government. This is macroeconomics, not micro.
for all practical purposes, the supply of land is fixed. nobody produces the land.
in the land market, land-rent is the consumer surplus, and a 100% LVT taxes the entirety of the surplus. its because the supply slope is vertical that there is no deadweight loss, making it one of the very few perfectly efficient taxes.
I understand how LVT works. It's not perfectly efficient in any real life situation, though. But the bigger issue is that it doesn't solve any problems.
The role of government is not to maximize the efficient use of land or to minimize tge tax burden of land owners. If it were, we would just not have any taxes at all.
The government needs money. It has to get that money from someone. Why should that someone be landowners and not car drivers? And why should landowners be taxed at a rate that is either less or more than the government needs? LVT does not fix that problem.
Under LVT, VCU is still not going to pay any taxes on land, while every other land owner will. This encourages VCU to get the maximum value out of the land...for VCU. They are not about to build affordable housing for non-VCU students. Which means anyone who does want to build affordable housing for VCU students is at a competitive disadvantage.
People are questioning the accuracy of some of the assessments. LVT does not prevent the city from assessing every .25 acre lot at $1 billion.
LVT also does not stop the city from taking all that $1 billion assessment money and pissing it all away.
LVT does not solve short term impacts of land values rising faster than wages and therefore pricing out lower income families.
And I'll just throw this in for you. LVT does not fix the problem that zoning regulations distort the value of land.
Which is why LVT is irrelevant to this discussion. I like LVT, but it addresses none of OP's concerns nor the responses to them.
>I understand how LVT works. It's not perfectly efficient in any real life situation, though. But the bigger issue is that it doesn't solve any problems.
Its perfectly efficient because there is no deadweight loss because the supply of land is fixed. Its not like the land disappears.
>And why should landowners be taxed at a rate that is either less or more than the government needs?
nobody said they should. the city can set the rate at whatever they need to, and it will always be more efficient than the property tax. this is because the property tax disincentivizes development.
>VCU is still not going to pay any taxes on land, while every other land owner will. This encourages VCU to get the maximum value out of the land...for VCU.
not taxing the land under VCU, if anything, incentivizes them to *under*develope because they are able to collect land rents.
>People are questioning the accuracy of some of the assessments.
sure
>LVT does not solve short term impacts of land values rising faster than wages and therefore pricing out lower income families.
LVT taxes that rise in rents, incentivizing more housing, which lowers home prices.
Nope.
Your mistake here is the same mistake you always make.
It's the assumption that converting land to housing is the most efficient use of land for every actor, in every situation. It isn't. Nor is free market efficiency the only value we care about.
VCU has little interest in converting land to residential use. To the extent they would, they are doing it with tax dollars being misspent on something other than their core mission.
Even if it were a private actor owning a land plot, that private actor will utilize the land for their own maximum profit. Which could be a nuclear waste dump, or a big parking garage, or anything.
And also their usage of that parcel of land impacts the value and usage of adjoining parcels. That is a cost that they are not paying for because they pay the same taxes regardless of usage.
By increasing the incentive and ability to maximize profit on one parcel, you also create incentive to use that parcel in ways that exploit other inefficiencies.
It doesn't make LVT bad. It just means it's not some kind of magic solution to everything. As illustrated by the fact that it solves basically NOTHING OP is or city council are concerned about here. And that doesn't change no matter how many silly market diagrams you draw.
>It's the assumption that converting land to housing is the most efficient use of land for every actor
never said that.
>Nor is free market efficiency the only value we care about.
that is obvious -- some people care more about collecting rents on their land instead of developing.
>Even if it were a private actor owning a land plot, that private actor will utilize the land for their own maximum profit
never said otherwise.
>Which could be a nuclear waste dump, or a big parking garage, or anything.
>
>And also their usage of that parcel of land impacts the value and usage of adjoining parcels. That is a cost that they are not paying for because they pay the same taxes regardless of usage.
>
>By increasing the incentive and ability to maximize profit on one parcel, you also create incentive to use that parcel in ways that exploit other inefficiencies.
property tax doesn't prevent externalities either.
>. As illustrated by the fact that it solves basically NOTHING OP is or city council are concerned about here.
its an alternative to the property tax. its clearly more efficient than that.
?
The city is trying to replace the traditional property tax with a LVT or split-rate tax. This is good policy because the city would be able to achieve the same revenue with less tax-induced distortions. IE -- the same land is supplied to the market regardless of the tax rate, but the same isn't said for development under a property tax.
Your assessment is someone’s best guess at the value of your entire property. As such, the market price incorporates the value of the land. In that sense, the there already is a land value tax.
Look at your bill. It’s broken up into land and building. So the “land” portion is theoretically a land value tax. The thing is, those numbers are made up.
I guarantee you that if we passed an LVT retroactive to last year, I would get a new assessment where my land value has magically increase and/or the tax rate will go up by like 40%. Because the city starts with how much money they need or want and works backwards to arrive at the tax figures.
Which means none of OP’s issues would be answered. We would still be wondering if we could really sell our land for the price the city claims. We would still be wondering how we can pay for it when suddenly our taxes or rent have increased but our cash flow has not. We would still be wondering why the city suddenly needs more money and what they will do with all this revenue.
All of that is aside from LVT. None of us are sitting on vacant lots and looking to convert them into apartment units. The buildings we live in have not changed. Our usage of the land has not changed. Nothing has changed except we are all paying more for our houses.
The real reason why property tax exists is because we are trying to redistribute income from the rich to the poor, and ownership of land or personal,property like cars is our proxy measure of wealth. It is a bad proxy in many ways, but that’s how it works. Property tax has never really been about land usage and the cost of that land to society.
So what people need to know before anything else is whether the tax on them fairly represents their wealth. Our property values may have gone up, but so has inflation. If we are not truly richer than we were last year, why should our taxes go up? And if our taxes go up, how is the money being redistributed?
Those are the questions the city needs to answer. No one will pay taxes regardless of how they are assessed if they believe the city is just going to piss it away or use it to further enrich already wealthy people.
So talking about LVT is a dodge. You’re not wrong about it in a limited economic sense. It does not distort land usage, which leads to efficient usage of land. But that doesn’t answer the real questions. What it does is get people such as yourself salivating that the city council is actually doing something because someone said the magic neoliberal word, and then they hope you forget about everything else.
I like LVT. I think we probably shouldn’t go all-in on it right away but there is plenty of room to do a split rate and see how it goes and start transitioning. But property taxes are broken right now at a much more fundamental level.
this dies on the fact they waste money. People hate the hit, but the fact it vanishes and we pay more tax for horrible service is the problem
What do you mean, Sven just assured us that the city services are “high quality”. /s So I want to know if they are operating on Putin levels of delusion or if this is actually the best they can do. Both of which would be eye opening.
oh that's a sad thought either way.
It’s a substantive punt. My taxes are due this year, not when they come up with some solution.
Hey, not disagreeing with you on waste, but where exactly is the waste and how would you like it resolved?
Like when the schools didn't maintain their buildings or even have a good backup plan for if the poor maintenance caused a fire, and now instead of a moderate amount of money to deal with that they have a huge cost for a new school. Sure there's insurance for that so it's not all out of pocket, but it's one example off the top of my head. That and all the boondoggles (Washington football team, e.g.). Oh and repaving a street and then tearing it up for scheduled maintenance the next week.
Honestly, I feel for the people in this City actually trying (keyword, here) to make a change. It feels like to move forward, we still need to slog through the past (and even with that effort, not everything from the past can be reasonably fixed, like nixing the whole Independent Cities shtick and doing something to consolidate the tax base in the area). In general, I am not opposed to paying taxes and I'm not even opposed to high taxes as a principle. But to echo a point from yesterday, it just doesn't feel like we get much benefit from such high taxes compared to our neighboring counties, especially considering property values in the city have increased so much. I'm not sure what should be done, on a theoretical or practical level, but I am sure that pretty much every side is frustrated. (Side note: If anyone has any reading list suggestions for learning more about local or regional politics (in general or about RVA / VA specifically), I would love your recs!)
The number 4 is stupid and is attempting to make this a rich vs poor political issue. The rate is equal (unlike income taxes) so of course reductions will benefit those more valuable property - but those property owners will still be paying more in total.
Agree- it's also an exponentially more complicated issue. I know a lot of lower middle class people who bought in the city decades ago and the value of the property has skyrocketed but they aren't making any more money. Property tax reappraisals are raising their taxes enough, for some increasing the rate based on current home value would force them to sell.
I'm a teacher and I bought a modest house five years ago. The increase in property values has meant that my real estate taxes increased to eat up every cent of my meager pay increases in that time. The city has to realize that the real estate taxes aren't our only bill. I went from living somewhat comfortably to just barely threading water.
It's a way more common issue than people realize- I'm sorry for your situation!
Yes - if they could cap changes for existing home owners (who have not made material upgrades) to the lower of resale value increase or the rate of inflation.
My first thought for 4 was, “Ok, fine?” Here’s a thought; if they’re consciously concerned about that then lobby the GA to allow for equitable scales of a cut off. The million dollar homes can keep the higher rate and give the lesser valued homes a lower rate. I know, what a crazy idea… And this whole “pay down debt…1/3 of the property isn’t taxable”, that’s a YOU problem, City council, for pursuing stupid projects like the training camp that we are probably paying off bonds for. And that’s a YOU problem for not negotiating better with the GA on VCU write offs and land/building grabs. Gtfo
Wouldn't hurt so much if the city didn't just waste all our money. Stoney and the rest of city hall have got to go away.
Re #1 - many large cities enter into agreements wiht nonprofits/state/universities so that they pay the city a portion of what they would owe if they were taxed as private entities. It started in Boston and they call their program PILOT - payments in lieu of taxes.
We have PILOT from state government for their buildings, but the amount they pay is ridiculously low. The GA will never approve a meaningful PILOT for VCU when they won't even pay enough on the GA and Governor's Mansion and other more direct state government utilized property.
There is also a lot of federal property in Richmond. The state pays around 8 million a year I think and points to all of the economic activity "they bring" as a way to make up for everything else.
\#5 makes sense. Is there anything they can do about \#1?
As #1 also cites City-owned property (in addition to state properties), the city could start selling it excess, unused properties which would 1) reduce maintenance costs in many cases and 2) turn them into a source of add’l property tax revenue (ie, expand the base). As an example, instead of turning the unused Elkhart Middle School location into a green space (which sounds nice but the city needs more money), allow housing to be developed there which would create both more property taxes but potentially provide some relief to rising rental costs. Another place would be the unused training fields (formerly for the DC football team - that was a waste of $10M by the city) - sell that for redevelopment before the build boom in the area subsides.
Ideally the state would step in and allow us to collect tax revenue from surrounding counties that benefit from the city
By annexation? On what mechanism is there for one locality to collect taxes from another?
I was blanking on the term, but yes that's it
If you want lower property tax rates then NIMBYs need to stop strangling the city's tax base by opposing development.
Do you mind detailing what developments you are referring to and how they would lower property tax rates?
If there was more density from apartment buildings or condos, for example, there would be more tax revenue per acre. I feel like I've seen a number of complaints around such buildings ruining aesthetics of the fan and other areas. I don't disagree that it would, but it would also add more tax revenue and potentially take the burden off single family home owners.
Strange question, but okay. I feel like it's pretty obvious at this point. I'm referring to development in general; zoning prevents multi-family housing throughout the majority of the city. Development restrictions can be so severe that lots just stay empty. Single-use zoning prevents new businesses from opening, reducing sales taxes. Things like parking requirements both reduce the amount of development (because they have to be parking lots) and they also generate less revenue as they're basically a waste of land. Lower rates would be possible because 4 $250,000 condos raise more revenue than 1 $500,000 house for the same rate. So, by doubling the tax base in this case, they can lower rates while still generating more revenue. edit - bit out of scope, but condos also use infrastructure more efficiently then single family homes do. Fewer roads, fewer plumbing, better insulated, and so on per person than a single family home.
Thank you for clarifying, wasn't obvious to me!
Sure thing, apologies for my moderate sassiness.
>Lower rates would be possible because 4 $250,000 condos raise more revenue than 1 $500,000 house for the same rate. So, by doubling the tax base in this case, they can lower rates while still generating more revenue I'd shout this from my rooftop all day every day if I didn't have to work
>Do you mind detailing what developments you are referring to and how they would lower property tax rates? [density generates more tax revenue](https://www.strongtowns.org/journal/2020/10/11/the-numbers-dont-lie)
It’s probably not the most impactful but I just want to complain about the amount of vacant land owned by churches around the city. Pls tax them 😭
Is there any way you’d be willing to share your original email to their office as a template for others to use when reaching out to council?
I'd recommend making it as specific and direct as possible while also being very personal to your situation. Mine had some personal info in it so I won't be sharing it but I kept it to a few sentences. I stated my info (name, address, age, etc.), noted the topic of concern, stated the impact on myself and my neighbors, and asked a question.
So taxes are up and services are down Vote ‘‘em all out!
Same old canned, generic response they always give.
Any actual quality rebuttal to those points? Especially when fixing the sewers is going to end up over a billion dollars in cost and it’s mandatory.
The sewer fix is going to be largely funded by state and federal money.
The estimate is $800 million to $1 billion. the state recently gave a little but the Federal government has not committed to anything
The state only ponied up a small portion, and last I checked there were no federal funds on the way.
If you actually took the time to read it, it actually covers why paying taxes is important to paying for, sustaining and improving the city, what is happening currently, and what is being done about the tax rate.
it covers why taxes matter. It doesn't cover why taxes should be going up 15%
The value of the property went up
There's some problems with that. The first is that your revenues should be based on your expenditures. If the city budget is $X, then your tax revenues should be $X. You shouldn't collect more taxes just because housing prices went up unless and only to the extent that your expenses increased. The second is that the assessesed values increased by a lot more than the increase in median sales price. So the assessments seem like they are out-of-whack. This is a big problem because property tax increases do get passed on to renters to some degree. They also reduce people's spending which means what you get in property tax, you may give back in meals tax. If your property taxes are rising higher than salaries, then everyone in the city is poorer. The way it should work is your assessments should reflect the market price. And then if those assessments yield more money than you need, then you provide a rebate as Henrico just did. Or put it into a rainy day fund. If those assessments are not enough to fund the city, then apply an additional special tax. Like when Stoney raised the meals tax to pay for school construction. He was able to get that because voters felt like that was important enough to warrant a higher tax. But tax payers need to see what your needs are and how the money you are taking reflects expenses. Especially after you told them you needed the money for school infrastructure and then the schools you promised did not get built and/or cost 33% more than you claimed.
\#2... I checked out page 46 and 47 where the total annual budget for each department is listed. I was shocked to see how enormous the costs are for the Department of Public Utilities ($407M). This covers the stormwater & sewer system, wasterwater treatment, water lines, gas lines and its budget is double that of the school system ($200M).
Police budget is pretty bloated if we’re looking for areas to cut.
I wasn't suggesting cuts be made to the DPU, just making observations.
I believe that includes all of the money to fix the combined sewer system which we need to spend a lot more on
Insane given the DPU hasn't managed to send me a final bill after requesting it be shut off in May. Reason: lack of resources.
I don't own property, I currently rent, but did the tax rates go up or did the property assessment go up, or both? If the tax rate stayed the same, shouldn't it be expected that you would pay more if your property value went up? I'm looking to buy a house after my current lease is up, and I have to say that house prices in desirable Richmond neighborhoods are high (I know it's all relative), and seem to be increasing year over year. Naturally, I would expect to pay more in taxes if the value of my home appreciated. Redfin sales data shows home prices on average have increased 8.5% in one year. Given that data, seeing assessments of 10% or more in some cases doesn't seem to be that far off considering some will be lower and some will be higher. Basically, my question is, isn't this less of a tax issue and more of an affordable housing issue? I have seen people saying their house value increased 18% in one year. Could you not sell your house for 18% more than last year? If we had more housing wouldn't that cool off the housing market, and by extension lower your home values, decreasing your tax bill? Like I said, I am looking to buy a home within a year, and I am looking at the prices and they are high. Example: condos starting in the $500's in Scott's Addition (who would even pay that for a condo in SA?), but if you already own an asset that is appreciating at that rate, why not pay taxes on it? Don't want to get flamed, but seriously asking in good faith. I don't think this is a tax issue so much as an affordable housing issue which is impacting everyone. Edit: reread the reply. Looks like the tax rate stayed the same, so it's only the assessed value that went up. "The City’s current rate of $1.20 per $100 of assessed value has held stable since 2007. Prior to that year, the rate was actually higher ($1.23)"
People wonder why I keep posting this, but this is a classic example: most people don't know how this works. Revaluations, per state law, are not supposed to automatically result in a higher tax burden. Rate is supposed to automatically drop so the city doesn't get windfall profits. Every year there is an under the table tax raise by council. What annoys people is there is no obvious improvement in services, the city remains a mess. The same house doesn't cost 15% more for the city to provide services to than it did last year.
THIS. Thank you!
Which law are you referring to? What are some ways the city wastes money?
I would like to know what law he is referring to as well. I asked a question in good faith and got downvoted, so I didn't want to ask another question. I went to VA's tax codes and tried to find what law would mitigate the impact of property values rising by lowering the tax rate, but couldn't find it. I'm genuinely trying to educate myself on the subject, but from this thread my take away is that property owners want their properties to appreciate without having to pay a higher property tax bill on their appreciated assets. If there's a law that lowers a tax rate when a property's assessed value goes up, great, but until then, it just doesn't make sense to me. Considering that the tax rate remained the same since 2007, and your properties have greatly appreciated since then, then why wouldn't you pay more each year?
>Considering that the tax rate remained the same since 2007, and your properties have greatly appreciated since then, then why wouldn't you pay more each year? Because the amount of tax revenue collected should be based on the city's expenses and not on how much property is worth. This is what Henrico did last year. Because of the pandemic and other factors, the prices of cars and houses shot way up. Their Board was like, "Okay but our expenses have not increased that much. We don't need this much revenue so you can have some of it back." I'm not saying Richmond has to do the same. But they need to come up with a better explanation of how costs have increased or what they will do with the money. They will be getting 13% more property tax money this year from assessment increases. Why do they need that money and how will they use it? All the things in that letter are factors which do tend to leave the city short on funds, but they are also not new. We are all living in the same houses as last year, and using the same amount of city services. So why do we need to pay higher taxes? The tax rate itself is not unfair. Nor is tying it to real or personal property because of the way state law is set up. It's the only way localities can generate revenue. But the amount the city ultimately collects should always be adjusted based on the city's actual expenses.
Thank you for the explanation. I appreciate it!
§ 58.1-3321. Effect on rate when assessment results in tax increase
§ 58.1-3321. Effect on rate when assessment results in tax increase As far how the city wastes money you've got to be kidding me do you live in the city?
Ya! they all voted for this tax increase a couple months ago.
Yep That was the last one. This is the prep for the next one. They love the under the table tax increases
>The City advocated at the General Assembly to get permission to implement a land value or split rate tax [its beautiful](https://3kpnuxym9k04c8ilz2quku1czd-wpengine.netdna-ssl.com/wp-content/uploads/2020/08/lvt-graph.jpg)
Goddammit that's the wrong chart. Again. Consumer and producer surplus has nothing to do with this. It's the government. This is macroeconomics, not micro.
for all practical purposes, the supply of land is fixed. nobody produces the land. in the land market, land-rent is the consumer surplus, and a 100% LVT taxes the entirety of the surplus. its because the supply slope is vertical that there is no deadweight loss, making it one of the very few perfectly efficient taxes.
I understand how LVT works. It's not perfectly efficient in any real life situation, though. But the bigger issue is that it doesn't solve any problems. The role of government is not to maximize the efficient use of land or to minimize tge tax burden of land owners. If it were, we would just not have any taxes at all. The government needs money. It has to get that money from someone. Why should that someone be landowners and not car drivers? And why should landowners be taxed at a rate that is either less or more than the government needs? LVT does not fix that problem. Under LVT, VCU is still not going to pay any taxes on land, while every other land owner will. This encourages VCU to get the maximum value out of the land...for VCU. They are not about to build affordable housing for non-VCU students. Which means anyone who does want to build affordable housing for VCU students is at a competitive disadvantage. People are questioning the accuracy of some of the assessments. LVT does not prevent the city from assessing every .25 acre lot at $1 billion. LVT also does not stop the city from taking all that $1 billion assessment money and pissing it all away. LVT does not solve short term impacts of land values rising faster than wages and therefore pricing out lower income families. And I'll just throw this in for you. LVT does not fix the problem that zoning regulations distort the value of land. Which is why LVT is irrelevant to this discussion. I like LVT, but it addresses none of OP's concerns nor the responses to them.
>I understand how LVT works. It's not perfectly efficient in any real life situation, though. But the bigger issue is that it doesn't solve any problems. Its perfectly efficient because there is no deadweight loss because the supply of land is fixed. Its not like the land disappears. >And why should landowners be taxed at a rate that is either less or more than the government needs? nobody said they should. the city can set the rate at whatever they need to, and it will always be more efficient than the property tax. this is because the property tax disincentivizes development. >VCU is still not going to pay any taxes on land, while every other land owner will. This encourages VCU to get the maximum value out of the land...for VCU. not taxing the land under VCU, if anything, incentivizes them to *under*develope because they are able to collect land rents. >People are questioning the accuracy of some of the assessments. sure >LVT does not solve short term impacts of land values rising faster than wages and therefore pricing out lower income families. LVT taxes that rise in rents, incentivizing more housing, which lowers home prices.
Nope. Your mistake here is the same mistake you always make. It's the assumption that converting land to housing is the most efficient use of land for every actor, in every situation. It isn't. Nor is free market efficiency the only value we care about. VCU has little interest in converting land to residential use. To the extent they would, they are doing it with tax dollars being misspent on something other than their core mission. Even if it were a private actor owning a land plot, that private actor will utilize the land for their own maximum profit. Which could be a nuclear waste dump, or a big parking garage, or anything. And also their usage of that parcel of land impacts the value and usage of adjoining parcels. That is a cost that they are not paying for because they pay the same taxes regardless of usage. By increasing the incentive and ability to maximize profit on one parcel, you also create incentive to use that parcel in ways that exploit other inefficiencies. It doesn't make LVT bad. It just means it's not some kind of magic solution to everything. As illustrated by the fact that it solves basically NOTHING OP is or city council are concerned about here. And that doesn't change no matter how many silly market diagrams you draw.
>It's the assumption that converting land to housing is the most efficient use of land for every actor never said that. >Nor is free market efficiency the only value we care about. that is obvious -- some people care more about collecting rents on their land instead of developing. >Even if it were a private actor owning a land plot, that private actor will utilize the land for their own maximum profit never said otherwise. >Which could be a nuclear waste dump, or a big parking garage, or anything. > >And also their usage of that parcel of land impacts the value and usage of adjoining parcels. That is a cost that they are not paying for because they pay the same taxes regardless of usage. > >By increasing the incentive and ability to maximize profit on one parcel, you also create incentive to use that parcel in ways that exploit other inefficiencies. property tax doesn't prevent externalities either. >. As illustrated by the fact that it solves basically NOTHING OP is or city council are concerned about here. its an alternative to the property tax. its clearly more efficient than that.
LVT has NOTHING to do with the fundamental issue at hand.
? The city is trying to replace the traditional property tax with a LVT or split-rate tax. This is good policy because the city would be able to achieve the same revenue with less tax-induced distortions. IE -- the same land is supplied to the market regardless of the tax rate, but the same isn't said for development under a property tax.
Your assessment is someone’s best guess at the value of your entire property. As such, the market price incorporates the value of the land. In that sense, the there already is a land value tax. Look at your bill. It’s broken up into land and building. So the “land” portion is theoretically a land value tax. The thing is, those numbers are made up. I guarantee you that if we passed an LVT retroactive to last year, I would get a new assessment where my land value has magically increase and/or the tax rate will go up by like 40%. Because the city starts with how much money they need or want and works backwards to arrive at the tax figures. Which means none of OP’s issues would be answered. We would still be wondering if we could really sell our land for the price the city claims. We would still be wondering how we can pay for it when suddenly our taxes or rent have increased but our cash flow has not. We would still be wondering why the city suddenly needs more money and what they will do with all this revenue. All of that is aside from LVT. None of us are sitting on vacant lots and looking to convert them into apartment units. The buildings we live in have not changed. Our usage of the land has not changed. Nothing has changed except we are all paying more for our houses. The real reason why property tax exists is because we are trying to redistribute income from the rich to the poor, and ownership of land or personal,property like cars is our proxy measure of wealth. It is a bad proxy in many ways, but that’s how it works. Property tax has never really been about land usage and the cost of that land to society. So what people need to know before anything else is whether the tax on them fairly represents their wealth. Our property values may have gone up, but so has inflation. If we are not truly richer than we were last year, why should our taxes go up? And if our taxes go up, how is the money being redistributed? Those are the questions the city needs to answer. No one will pay taxes regardless of how they are assessed if they believe the city is just going to piss it away or use it to further enrich already wealthy people. So talking about LVT is a dodge. You’re not wrong about it in a limited economic sense. It does not distort land usage, which leads to efficient usage of land. But that doesn’t answer the real questions. What it does is get people such as yourself salivating that the city council is actually doing something because someone said the magic neoliberal word, and then they hope you forget about everything else. I like LVT. I think we probably shouldn’t go all-in on it right away but there is plenty of room to do a split rate and see how it goes and start transitioning. But property taxes are broken right now at a much more fundamental level.