Opinion Your Views — 04 April 2013
What’s really behind that proposed tax hike?

To the editor:

Blame City Hall for proposed tax increases. There is a considerable amount of misinformation being peddled in an attempt to justify the outrageous tax increases in the City of Alexandria’s proposed fiscal 2014 budget. Make no mistake: These taxes are City Hall’s choice.

In her March 14 article (“Where did that shortfall come from?”), Alexandria Times reporter Melissa Quinn, paraphrasing the director of the office of management and budget, writes, “With mounting transportation costs and increased enrollment at Alexandria City Public Schools, tax and fee hikes are a necessary evil [to cover the City of Alexandria’s projected $31 million shortfall].”

Oh, really?

The actual budget — which is available online — tells a different story. It shows that the actual driver of tax increases is the city council’s plan to triple spending on capital expenditures (from $7 million to $21 million): in other words, new spending on building projects. Compare that to the alleged $8 million shortfall relating to schools ($6 million) and transportation ($2 million), and you will see what is really driving this tax increase.

Folks, the numbers do not lie.

You will pay for this extravagance, of course. Again. In 2006, the property tax rate was 81.5 cents. If we are saddled with this year’s proposed tax increase, the rate will be north of $1.03 — more than a 25-percent increase in property taxes during the recession.

Oh, and they want to raise the car tax, too.

If this paper’s online polls are any indication, the vast majority of Alexandrians oppose these tax increases. I, for one, wholly support Jennifer Fahey’s call in her recent editorial (“Alexandria needs a more fiscally creative city manager,” March 7) for more fiscal creativity from our elected leaders.

- T.E. Ross
Alexandria

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(1) Reader Comment

  1. Exactly right T.E.!!

    I have been looking at the numbers too. Here are some additional facts straight from city hall’s Comprehensive Annual Financial Report from Fiscal Year 2012.

    1) Real estate assessments generate over half of the city’s general fund revenues

    2) “The increase in tax revenues is primarily attributable to an increase in the City’s assessed real property tax base in calendar year 2012.”

    3) “If the City does decide to proceed with the financing of the Metrorail station, it will require a material upward revision to its current debt policy guideline targets and limits, in that the amount of debt that may be issued would exceed the City’s current debt targets and ceilings.”

    4) Current debt policy limits Debt as a Percentage of Fair Market Real Property Value(=Outstanding City Debt/Gross Fair Market Value of Real Property) to 1.6%. Presumably this is kept at that percentage for issues related to good fiscal management and possibly is a factor in the city’s AAA rating.

    Because city revenue and debt are so intricately tied to fair market real propery values (residential and commercial) it is a near certainty that real estate taxes will increase along with the capital improvements T.E. mentions. By the way the city has taken in more revenue since 2003 to today through residential taxes vice commercial taxes.

    What folks fail to see is that the promise of new revenue via new commercial buildings and businesses does not come to the city coffers immediately and, in the meantime, current residents taxes are used to make these capital improvements a reality.

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