County’s higher property taxes prompt “a whole lot” of complaints, but some support, from taxpayers
By James P. Gannon
With the December 5 deadline for paying Rappahannock County real estate taxes looming, county property owners are reacting with varying degrees of indignation, resignation, and even appreciation in the face of a heavier property tax burden for 2006. (See our commentary, “Thoughts on Taxation,” in the Opinion section–click on Opinion in the column at left.)
Wendy Duke of Amissville, for one, is not at all pleased. Her mortgage company, which pays her annual county tax bill from an escrow account that she feeds with a payment every month, is increasing its tax bite. “I will be paying a total of $89 a month more because of my property in Rappahannock County, and I am really ticked because I see no improvement in our local government that helps me,” Duke told The Rappahannock Voice.
“I used to consider my taxes low compared to my neighbors and was OK with past years’ increases,” she added. “I felt they were modest. This year I am outraged and I am going to be expecting much more from my local government.”
Robert F. Klaus said the 2006 tax bill on his home property in Amissville rose to $3,063, up 23% from the previous year’s $2,469. But he’s not so upset. “My reaction to Rappahannock County taxes runs directly contrary to my opinions about taxes in general,” Klaus said. Because real estate taxes in this small, rural county are levied by local officials, Klaus believes taxpayers here have reasonably good “control of the spenders,” so he feels “less reflexively adverse to being taxed.”
Taxes in Rappahannock, he notes, are significantly lower than in Northern Virginia counties, “because Rappahannock is not trying to deal with the explosive growth and attendant difficulties of most of our sister counties,” he added. But he said he’s worried about the trend of higher property assessments which may tempt county supervisors to permit higher spending without raising the politically-sensitive tax rate on property.
Beverly Hunter admits she was surprised by the sharp rise in 2006 property taxes on the home where she and husband Hal live in Amissville. Their tax bill jumped nearly 52% in one year, from $1,561 in 2005 to $2,371 this year. “I am surprised that the increase is as much as it is,” she said. “I was not aware that the county budget had increased that much. But I take responsibility for not knowing–I could have paid more attention to the budget process.”
Still, Bev Hunter thinks it is “a rare privilege” to be able to live in “a beautiful, sparsely populated place with little traffic, not one traffic light, relatively clean air, citizens dedicated to community,” and other aspects of rural Rappahannock County. Moreover, the county government runs on “an exceptionally lean staff” of dedicated people who “keep our local government running with such limited resources,” she said. And she’s grateful that taxes here are generally lower than surrounding counties.
At the county Treasurer’s office, Treasurer Frances Foster said she is getting “a whole lot” of complaints about this year’s rise in real estate taxes, “much more” than in previous years. “People are saying that they are going to have to sell their homes and move,” because they can’t afford the taxes, she said. “It is very hard on some of these people who have been here for all their lives and are living on Social Security,” Foster added. “Some of them didn’t have any idea the taxes would go up that much in one year.”
The sharp rise in real estate values in Rappahannock County in the last few years produced unusually large increases in the tax-assessment value of properties in 2006. For example, the Hunters’ property was reassessed at $408,900 this year, a whopping 92% higher than the $213,400 assessment previously. Many taxpayers saw their assessments rise 75% to 100% or more, due to the reassessment done in mid-2006–just as values of real estate in the region appear to have peaked.
But higher assessed values do not, by themselves, produce higher real estate tax bills. It is possible for local governments to fully offset the increase in assessments by lowering the tax rate enough to keep property tax revenues level with the previous year. In theory, at least, the Rappahannock County Board of Supervisors could have done that this year by setting the rate at 50 cents per $100 of assessed value. That rate would have produced as much tax revenue as the 80 cent-per-$100 rate in effect for 2005.
But the county supervisors instead set the tax rate at 58 cents per $100, in order to produce additional revenue to cover anticipated increases in county spending for schools, for a new government center, and other purposes. Thus, the tax rate was set 16% higher than the stable-revenue rate of 50 cents. This is the real tax increase for 2006.
However, most taxpayers probably didn’t see an increase of 16% in their own bills. That was just the total revenue increase for the county. Many taxpayers saw their bills rise much more than that, and some saw a smaller increase, or no increase, or even a decline.
Why is there such variation from one neighbor to another? It’s because of the wide variation in property sizes, assessed values, and other circumstances, says County Administrator John McCarthy. In Rappahannock, there is no “typical” or “average” property. Unlike the heavily populated counties in Northern Virginia, where there may be thousands of homes on typical one-acre or half-acre lots, Rappahannock properties range from large farms to many country estates of 25 to 50 acres, to little village lots of one-third of an acre–making comparisons from one parcel to another difficult or meaningless, McCarthy notes.
Moreover, the county’s system of use-value taxation–commonly called “land use” taxation–further blurs the picture. “Since much of our land is enrolled in use-value taxation, and that land (for tax purposes) did not increase in value, many property owners with farmland in the program and no houses on the land saw their tax bill go down–due to the reduction in the rate” from 80 cents to 58 cents, the county administrator explained. “This of course means that homeowners saw theirs go up more.”
In Virginia, localities can elect to reduce the real estate tax burden on farm land and forested land by applying use-value taxation. This land-use taxation system ignores market values of properties and bases taxes on the land’s productivity for agricultural or forestry purposes instead. Thus, a sharp rise in market values of land which causes big increases in assessed values has no impact on those who enroll their property in the land-use taxation program.
To see the impact of the land-use system in dollar terms, consider these numbers from the county’s Commissioner of Revenue: The total assessed value of taxable real estate–land and buildings–in Rappahannock County is $2,112,509,400 in 2006. That’s $2.1 billion in round numbers. But the application of land-use values on many county properties reduces that number by $579.8 million. That leaves $1.53 billion of taxable value. So the land-use sytem wipes out more than half a billion dollars of taxable real estate value. (If the county could apply its 58-cents-per-$100 tax rate to that much property, it would produce another $3.36 million in tax revenues this year.)
Commissioner of Revenue Beverly Atkins, whose office administers the land-use program, says she constantly hears taxpayers complaining that the system is unfair and that it shifts the burden of taxes to smaller homeowners. People also complain that some landowners take unfair advantage of the program to reduce their tax bills, even though they aren’t really engaged in farming or forestry.
“We hear it all the time,” she said. “There probably are people in land use that should not be in the program.” Her office tries to verify that those claiming land-use are actually eligible for the program, by making random checks of properties. But not every property can be checked every year. “There is always some abuse in every program,” Atkins said. There are more than 2,000 parcels of land that have been in the program at some time since it started about 25 years ago–the vast majority of which are still eligible and claiming use-value tax rates, she added.
“It’s a good program,” Atkins said. “Most of the people comply, but there are always people who try to beat the system.” Keeping taxes low on farm and forest land reduces pressure on owners to sell or develop the property, thus preserving agriculture, forests and open space in the county. “If we did away with land use,” Atkins said, “there are people who would sell their property because they could not afford the taxes.”
Counties can choose whether or not to employ the land-use taxation sytem. But the state sets the rules and the use-values for farm and forest properties, so an individual county has to choose to be in or out of the program; it can’t substantially change the rules or the rates.
What’s your opinion on property taxes? Cast your vote in our tax poll in the left-hand column, or post your comment below–or do both.
This article was reported and written by James P. Gannon. For the record, the 2006 property tax bill on his home near Flint Hill was $2,029.42, up 27% from 2005, while the assessed value of that property jumped 75% to $349,900. The property is not in the land use program.
-- James P. GannonComments
Comment from WendyD
Time: November 28, 2006, 2:39 am
Well, I have to make some change to cover my extra $1100 a year. I decided that it is time to give in and have my pastures cut for hay and qualify for this land use tax break which will take 5 years to kick in (and yes the County can come check.) We also have 8 acres of forest that we need to destroy and turn into pasture for no reason other than for the tax break, but it makes good financial sense - although a shame to destroy the wooded part of the land when there is no livestock. We will just cut the trees, pull the stumps and I will have plenty of fire wood for years to come.
Many of my neighbors already do this grass-cut thing for the tax break and wondered why we have been holding out and it’s because I don’t like it when the grass gets long because I like to walk my land. Oh well, I guess that is over. Then there is the expendable money I don’t have to use now. To make up the $89 a month I will have to cut something out of my budget. Hmm, the first to go will be charitable contributions, and it only seems fair to start with organizations in this County - which over the long haul if there are enough of us that have this same sentiment that will make taxes go even higher but at least it will be shared by all and I won’t be alone and at least by then I will have my trees cut and my pastures being cut and have less tax burden.
I wanted to be a good resident but am being motivated into being less than what I hoped for. I only have so much money like everyone else - when I came here I could afford this house, land and taxes, no problem - now my taxes are almost double in just 5 years. I have a good job, yet things are tight. I budget and plan. Interest rates are up, gas is up, the cost of everything is up and so this tax rate pushed me over the edge. However if I tried to sell my house for what the county assesses at - HAHAHAHAHAHAHA!
So something else will suffer as a result and I decided it is not going to be any more of me or my money than necessary. I love the FDs, they do a great job, but the two I support in the county will be the first to go and then the other organizations I support in the county are out the door too. That takes care of about half my new tax burden just with this County alone. Then I can recoup about $250 from other odds and ends charitable contributions. That is about $750 a year right there. Then once the tax break kicks in I can wait a few more years before resuming contributions until it breaks even, assuming it ever does. The rest I have to figure out BECAUSE I AM ON MY OWN AS is the usual case I find myself in this county.
–Wendy Duke
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