Richmond faces drop in revenue
Falling property values could take a $12.2 million to $14.7 million whack out of Richmond government revenue next year, a survey by the city assessor shows.
It looks as if the total value of taxable real estate will drop 5 percent to 6 percent when the city reassesses property as of next Jan. 1, Assessor James D. Hester said.
That will cut $1 billion to $1.2 billion off the city's real estate tax base, which stood at $20.4 billion as of Jan. 1.
"There's a lot of pressure on commercial property," Hester said. "There's a lot of vacant space, and it looks like it isn't filling that fast."
Owners of offices and other commercial buildings are trying to fill that empty space by lowering rents, he said. The combination of empty space and lower rents on leases they are signing affects property values, he said. The reason is that part of what tax assessors look at when putting a value on commercial property is the amount of income they generate.
The Richmond area's office vacancy rate rose to 16.4 percent at the end of June, from 15.5 percent at the end of the first quarter.
Hester said it is harder to be sure about trends in residential real estate because the market is slow, which means there are few sales on which to base property value estimates. But he said he believes residential property values are holding up better than commercial values.
In the first quarter of 2009, the average sales price for homes in the city fell 11 percent from the year before, to $231,095, assessors' office records show. The number of sales, 198, was down 42 percent.
The city was forecasting a 9 percent drop in real estate tax collections for the current fiscal year, ending June 30, 2010, with a slight increase in the following year. The Jan. 1 reassessment will affect tax collections for part of the current fiscal year and part of the next.
In Hanover County, officials meet monthly to review real estate trends, and the assessor will give a preliminary look forward in August, Finance Director Vivian McGettigan said. "Right now, things look stable," she said.
Henrico County Finance Director John Vithoulkas and Chesterfield County Assessor Jonathan Davis said their counties do not do midyear snapshots of real estate values. They said they felt it is too early to comment on next year's real estate tax base.
Contact David Ress at (804) 649-6051 or
.
Reader Reactions
Waahhh. Cry me a river Mr. Hester. This baloney has gone on far enough. The article comes close to exposing the unfair assessment practices, but stops short of spelling it out for you. So let me do it now. You see, in Richmond, homeowners are taxed on a value that is based on 100% FAIR MARKET VALUE. That means that if 20 people in your neighborhood spent a year fixing their house to sell, then your house (which may or may not be in market condition) is automatically assessed based on those sales. Meanwhile, commercial property and rental property are taxed on a value that is based on MARKET RENT POTENTIAL. It is a totally unfair practice and the homeowner gets the short end of the stick and the bigger tax burden. Commercial properties should be taxed on fair market value as well. When I questioned the assessor’s office a couple of years ago, about this, I was advised that there weren’t enough sales statistics to fairly assess commercial property that way. Baloney! Even if NO commercial properties sold, the comparisons could still be done with stats from cities with similar market conditions. Like Nashville or Louisville. It is simply an inefficient way to rip-off the homeowner.
Now, here’s the kicker; After reading this article and paying close attention to Hester’s comments, I see what the goal is here. The assessor’s office is attempting to drop commercial assessments and multi-family property values, which will make the homeowner’s, once again, pick up the slack. Have rents REALLY gone down? I say NO! They have not. Then, he states that it is “harder to see the trends of residential real estate”. More bull! I see, every day, that residential values have dropped 15%. Hey Hester, how about starting with that number for homeowners? Give us a break here chief!
You folks need to wake up and get into the game here. Realize that you are all getting clipped by this racketeering gang in the 18-story ugly building at 10th and Broad!
Revenue won’t drop. Everyone knows that when the value of real estate drops the governing bodies increase the tax rates to make up the difference. The government is going to get its pound of flesh. Just wait till the foreclosure rates take another jump because people can’t afford to pay the taxes on the properties they could afford to buy in the first place.
What needs to drop is government spending.
I agree with the “Voice-of-Reason”. Continue to tax the self-motivated, hard working, and fortunate achievers until they, too, lose the will to work. Although the upper class carry the tax burden now and have upwards of 60% of their pay confiscated through some sort of tax or another, there is no reason not to push the tax limit to 75 or even 80%. The greed of those hard-working and diligent people is really offensive.
It’s obvious, those “haves” need to share more with the “have-nots.“ Quit being so greedy! A little more by the wealthy into the tax base will not effect the rich one bit. After all, they only have it because they took it from those less fortunate.
Another unsatisfied customer who has been paying attention to the problems in City government! Call us “legion” for we are many!!
It’s maddening to think that we have some folks on the Charter Review Commission who have the temerity to suggest that the City Auditor and City Attorney be appointed/fired by the Mayor! How is this going to improve governance? All we’ve done is place even more power into the Mayor’s Office!! There is no real “upside” to this proposal, but there sure is a “downside!“
The same Mayor’s Office is responsible for its appointed administrative personnel and the execution of City government. This is the branch that is supposed to run smoothly and not waste our taxpayer funds!
This branch is the historic weak link at the City! This branch has not demonstrated yet that it can spend our money prudently. This is the branch that continually needs cleaning up!
We need all the scrutiny we can muster to remain informed of the good, bad and ugly that is our City! Don’t compromise our ability to receive unbiased information and react as voters by allowing the Mayor’s office to influence or control these two watchdog agencies! This proposal appears to be no more than a thinly-veiled idea that will put us in the dark and tell us that “all is well!“
The historical dysfunction of the Mayor’s Office and the Administration (the executive branch) requires scrutiny! That’s what RTD, the City Auditor, and the City Attorney have been telling us over the last few years! The result is accountability and some new blood in the Mayor’s Office! Let’s keep up the good work and help the new Mayor turn this City around!
Each new Mayor and Administration arriving to City government is like Forrest Gump’s box of chocolates—you never know what you’re going to get! That is why we have checks and balances built in. There’s an old management expression when delegating tasks to subordinates—“trust, but verify!“ That’s why you keep the City Attorney and City Auditor far away from the Mayor’s Office!!! We want to trust the new Mayor and his team, but we want to be informed by a City Attorney and City Auditor whose information is not passed through the Mayor’s Office for editing and approval before being released to us! We desire no more “spin” or “no comment” as we’ve heard before!
If the executive branch of City government is truly concerned about building a well-run organization, then it will find these two watchdogs very helpful because they can offer much experience, expertise and insight! On the other hand, if the executive branch is given to lip-service only, then these two watchdogs are empowered to let us know that in due time too!
The independence of these two watchdog agencies has been our saving grace! How else would we have learned about the car allowance double-dipping, the employment flap over the assessor’s office, the budget flaps, or the waste of our financial resources in various City operations?
What is to keep this Mayor’s Office or future ones from directly interfering with the City Attorney and City Auditor’s agendas by dictating to them what should be looked at and what remains untouchable? Under the present arrangement, there is no conflict of interest for the City Auditor or City Attorney.
If this proposal passes, then a conflict of interest is now introduced, and the City Attorney and City Auditor are forced to consider the impact of reporting their findings to the public upon their next performance appraisal or their continued employment! Are we missing something here?
The City Attorney and City Auditor know that to speak untruthfully is professional suicide. Their bread and butter is impartial factual analysis and accurate interpretation of laws and regulations, yet this pending proposal will force these two offices to consider pleasing a new boss—the Mayor! Under previous administrations, these two professionals might easily find themselves in double jeopardy! Even worse, maybe neither one would still be here! So much for candor and stability!
The City Attorney and City Auditor cannot serve two masters, especially with the kinds of problems and waste of resources that they are still discovering and reporting to us!
The previous administrations failed to satisfy our desire for fiscally sound, ethical government. We can take care of that problem at the polls, and we have! However, if we didn’t have the unfettered truth from the City Attorney and City Auditor, then we wouldn’t be properly informed in order to effect some change and take back our City!
Some day, we’ll get it right, but we won’t get there if we shoot ourselves in the foot and weaken the ability of the only two agencies who speak freely, directly, and truthfully to us! We’ve learned that we can count on them! Let’s not louse that up too!
And it’s about TIME. My property taxes, through some unfathomable means, actually increased substantially this year, despite the downturn in property values. The city claimed they were calculated before values declined precipitously, but the downturn was certainly foreseeable and already underway when they conducted their assessments.
It’s time this city started getting its fiscal act together, from the top down. The utter incompetence, the neglect, the apathy, the dishonesty, and the arrogance with which this city is run waste incalculable amounts of money.
In the years I’ve lived in this city, I’ve seen the endless debacles of 6th street marketplace, a mayor who was double dipping on his car allowance, employees gassing up their own vehicles on the city dime, purchases not going out to bid, boondoggle trips to “sister cities”, the disastrous failure to separately collect yard waste from household waste, and so many others I can’t even begin to enumerate them.
This city is regularly cited as being one of the most poorly run municipalities in Virginia, and it should come as no surprise, given the above.
Remember when the city took the liberty of annexing part of Chesterfield County in an effort to boost tax revenue? Doesn’t seem to have helped much. We’re still in a financial black hole. How did we get here?
It’s time to stop looking to the citizens for more taxes, and start looking at the city’s inner workings at every level to operate more efficiently and effectively.
Stop wasting and stealing our money!
Post a Comment(Requires free registration)
- Please avoid offensive, vulgar, or hateful language.
- Respect others.
- Use the "Flag Comment" link when necessary.
- See the Terms and Conditions for details.
Advertisement