- By Omar Adams
- Published: April 17th, 2012
Local residents are in an uproar over proposed tax increases, specifically a $.10 increase in the real estate tax, which already runs at $1.05 per $100 of assessed property values. While no one actually likes taxes, perhaps a levelheaded look at Lynchburg’s proposed budget is in order.
Major spending hikes from all levels of government have been dumped on the desk of City Manager Kimball Payne with the request that he balance everything without offending too many voters. According to the 2013 budget proposal, Payne eliminated 31 personnel positions and found other ways to cut more than $4 million from the budget.
Four million dollars is hardly enough to cover the increased $3.7 million in operating costs for local schools, however, and the school board has requested an extra $4.7 million in funding. As someone who grew up in a penniless private school — and still received a good education — I may be able to find excess in a $92.6 million total education budget that a public school superintendent cannot see, but that is another issue.
As a remaining proposed tax increase, the $.10 increase in real estate taxes is expected to generate an additional $5 million in revenue to the city, according to the budget. Property taxes are non-dedicated revenue, which means they support any expenditure the city has in its general fund, Payne said.
Put in perspective, the property tax increase is the highest since 1995, but the current $1.05 rate has only existed since 2007, when Payne suggested lowering the rate from $1.11. An increase to $1.15 does not seem so large in context, especially considering state- and federally-mandated expense hikes like the EPA’s new stormwater regulations.
The one consideration to keep in mind is that, while the property tax rate has remained stationary for several years, assessed property values have increased — thus increasing taxes paid by landowners without changing rates, according to data from the City Assessor’s Office. Nevertheless, that increase can be applied across the country because of the pre-recession housing boom.
One major point of contention to the budget is the proposed five-year, $165.7 million Capital Improvement Program (CIP). Necessary infrastructure repairs are lumped together with plans to revitalize the downtown area.
Many local apartment owners, such as Heritage Park Apartments owner Josh Jones, oppose major spending increases, viewing them as wasteful. Landlords like Jones will be forced to raise rent fees to make up for the increased taxes, which cost tens of thousands of dollars for average-sized apartment complexes, according to the City Assessor’s Office.
“The city needs to be wiser about how it spends money,” Jones said. “It’s easy to spend other people’s money — you’re much more careful about your own.”
A capital investment like CIP could revitalize the historic downtown area and bring more business and life to the city, however. Should the area be made safer and more accessible than it is now, a redevelopment would be a welcome addition. The future benefits will significantly outweigh a near-term spending increase — if the project can be finished quickly and kept tightly under budget.
More budget cuts could probably be made, as with any government entity, but overall, Payne seems to have done an excellent job of juggling spending cuts and tax increases in an austere fiscal climate. Perhaps a native of “Tax-achusetts” just has an easier time accepting tax rates, however. If residents have complaints about the budget, they have one sure-fire way to fix it: voice their opinion in public council meetings and vote for the City Council candidate of their choice May 1.
“…Local assemblies of citizens constitute the strength of free nations,” Alexis de Toqueville wrote in his masterwork “Democracy in America.”
“Town meetings are to liberty what primary schools are to science — they bring it within the people’s reach, they teach men how to use and how to enjoy it. A nation may establish a system of free government, but without the spirit of municipal institutions, it cannot have the spirit of liberty.”