In some areas of the State 2005 property tax assessments increased 25% while in 2004 the average increase in property values increased 18.5%. A homeowner opens up the mail and learns that in only one year her property assessment has increased 40%. Assessments rose briskly in the inner suburbs, too — 20.6 percent and 19.5 percent … to name two. But in those closer-in communities, the rate of growth has slowed a bit from last year… average home values actually ticked down in the fourth quarter of 2005, although they are still about 20 percent higher than in the previous year. This isn’t Howard County. I am writing about our neighbor to the south. The Commonwealth of Virginia. (you can read more here). In Howard County the situation is actually worse in terms of the rate of increase in assessed values. This morning I wrote the following on Hayduke’s blog.
Homeowners don’t realize those gains until they sell the home. Right. These values are only on paper for those who are not selling. However, the State and the County is going to take property taxes based upon those valuations TODAY. Insurance premiums are going to rise based on those valuations TODAY. Out of pocket expenses are due TODAY. If these values stay as high as they are then one will realize them much later.
I read this in the Washington Times on a plane headed to Boston for the day.
“Many people have had the experience of their homes increasing in value on paper, but they cannot access that to help pay for the increased taxes,”
Talk about a de j’vue moment. Who was the bright fella who made the statement above? Democratic Governor of Virginia Timothy Kaine during his successful campaign to succeed Governor Mark Warner. Governor Kaine has also stated:
It (property taxes) is the fastest rising tax facing Virginians today. Property taxes are increasing at dramatic rates in many parts of our state, fast outstripping increases in individuals’ salaries and the cost of providing services.
Recognizing that rising property values are a windfall for local government and an unjust burden on homeowners Gov. Kaine is actually following up on one of his campaign promises. In fact it is a promise he made in April 2005 when he was behind in the polls against Kilgore and it helped propel him to the Governor’s mansion. From the Washington Times:
Gov. Timothy M. Kaine will push this winter for a measure that was among his first campaign pledges: allowing local governments to discount real estate taxes on homes by up to one-fifth [20%].
It turns out the Governor has some competition. State Senators and Assemblymen are proposing property tax relief measures on their own. In fact there are five other competing proposals. Some of the proposals would limit the amount of revenue increases a County can experience year over year on the current assessable base of property. Why the rush to cut property taxes? People are rightly concerned about the huge increases in assessed home values and the large new taxes they will be paying. Some others are concerned it is a threat to personal property rights in that government is making our property unaffordable. I don’t know about that but I do understand where they are coming from. Anyway, we should be concerned too. Now, I don’t think Howard County has to change the constitution in order to bail home owners out of this problem and still ensure that the County has enough money to operate at its current level. They can utilize the Constant Yield Tax Rate provision of State law and Howard County can lower its property tax rate to ensure that it receives the same amount of property tax revenue as it did last year. I think most everyone knows of the famous response to Virginia O’Hanlon’s question to the New York Sun newspaper. “Yes, VIRGINIA, There is a Santa Claus.” Well, it seems that in Virginia there is a Santa Claus and it will be some form of property tax relief for all home owners. As to Howard County I don’t know. My feeling is that tax relief (beyond the $100 we got from Robey) in Howard County is as likely as me capturing Santa Claus breaking into my home on Christmas morning. Given the fuss over the Senior tax cut and whether we can afford it our not I highly doubt we will see any relief. They know we can afford tax relief. If they don’t know it they should know it. I am certain that Mr. Ball’s and Mr. Fox’ task force will show we can afford both a senior tax cut and a broad based tax cut. I can hear it now. Read the rest of this entry »
