Editorial: Post-election tax hike: predictable and lamentable

Editorial: Post-election tax hike: predictable and lamentable

It should come as no great surprise to anyone in Alexandria that the city manager and city council are proposing an enormous property tax hike this year.

The reasons are straightforward. Council members don’t have to face the voters for another three years, so if they’re going to raise taxes, this year is politically best for them. They gamble that voters have short memories, and if they hold taxes firm in the next election year, which is not until 2015, most voters will forgive them this transgression.

Equally important, November’s election swept Republicans Frank Fannon and Alicia Hughes from office. Fannon and Hughes had consistently opposed tax increases and were council’s leading voices of moderation on fiscal issues. Indeed, absent their voices, there was little concern expressed by the new council at Tuesday’s meeting over the proposed increase.

And just how big is this tax hike that city residents face? The property tax rate would rise from 99.8 cents to $1.053 per $100 of assessed value — an increase of a whopping 5.5 cents. In addition, the vehicle personal property tax rate would increase by 25 cents, to $5 per $100 of assessed value.

This doesn’t take into account the fact that real estate assessments are up throughout Alexandria, meaning millions more dollars already were going to flow into city coffers without any increase to the tax rate.

In real terms, this means that from the rate hike alone, a person who owns a $500,000 house, with a $25,000 car, would see their Alexandria tax bill increase by $337.50. They would pay $6,515 in taxes next year to the city on their home and car.
We think taxing residents at this level is a bad idea.

Where there are tax increases of this magnitude, there are invariably steep spending spikes — and this budget is no exception. The fiscal 2014 budget proposed by City Manager Rashad Young is $626.6 million, an increase of 6.6 percent, or almost $39 million more than fiscal 2013.
We find it lamentable that city officials are passing the pain to already overtaxed residents rather than doing the harder work of cutting their spending. The best way to achieve significant spending savings is to cut employee positions. Council is not only avoiding making difficult cuts, but this budget actually gives employees full merit increases.

This tax hike is especially a blow to people on fixed or low incomes who have managed to buy a piece of property. Higher property taxes also will trickle down to low-income renters, who are likely to see their rents rise by landlords looking to make up lost revenue. It is yet another example of our elected leaders saying one thing but doing another on the affordability issue.

Voters tend to get what we deserve, and in electing a city council of all one party, what we are getting is an enormous dose of bitter tax medicine. As Chief Justice John Roberts famously said in his decision on the Affordable Care Act, “Elections have consequences.”