Colonial Heights: Lean, mean, and grabbing my green

Colonial Heights City Council recently passed an ordinance to fund the new courthouse project that requires a one percent increase in the local meals tax rate and a four-cent hike to the current property tax rate.

While council has gone to extreme lengths to show that the net effect of the tax hike would in essence result in less taxes this year due to a drop in assessed home values, it isn’t so for everyone. There are indeed some houses in the city that are either unchanged by the reassessment or fall on the other side and actually have an increased assessment. Anyway you look at it it’s a tax hike, even if it means I will have, on average, an extra $39 in my pocket.

Council has been good in trying to deflect the cost of building the new courthouse, and it’s not really the fault of the current council that they are facing a lawsuit from the 12^th Judicial Circuit demanding better court facilities. Still, it stands to reason that something was going to happen. The Circuit Court has not been happy with our old courthouse for years, and who could blame them really?

If you have ever had an opportunity to sit in one of our court rooms, it wouldn’t take too long to figure out they have problems.  They are old, they are antiquated, and they really don’t get the job done.  They have been an issue for some time, and it’s somewhat surprising that it has taken the Circuit Court so long to file suit against the City.

It has to get a long way down the road before the courts move to filing a law suit. Usually, the mere threat of a law suit is enough for a community to react and take action toward building “adequate” court facilities. Locally, we just need to look at Hopewell, Prince George, and Chesterfield for prime examples of localities responding to circuit court complaints about court house needs to see what can happen.

Council would like to shift the blame for the tax increase squarely on the shoulders of the 12^th Judicial Court.  But the court building issue has been going on for some time. A lawsuit is probably the last thing the courts want to do, and they would much rather use a potential lawsuit as a club to get the municipality to do what they are supposed to do, provide “adequate” court space.

Now, the argument over what constitutes “adequate” court space is another matter altogether. And it’s a losing argument, since the 12^th Judicial Circuit actually has the right to say whether a certain facility is adequate or not.  It’s interesting that they get to move the issue into their home field or court so to speak, but all of that should have had the attention of the local officials.

While I don’t particularly care for the tax hike, and have a real hard time swallowing the whole “real estate assessments are going down” rationale for not being in my pocket any deeper than they are now, I still think the city needs to look at their own budget a bit more.

The city is doing its best to figure out a way to pay the costs incurred by the new courthouse.  But they don’t seem to be looking at all options. This year is the first year that the city budget shows a decrease in property taxes.  In 2008-09, property taxes increased by $1,130,454; in ’09-‘10 taxes grew by $262,678; in ’10-11, tack on an additional $229,117.  This year, the proposed budget shows $105,817 less than the last year, including the four cent increase.  The difference this year is the result of real estate reassessments, just as the city points out in the pamphlet they sent out explaining the tax hike.

This recession isn’t new. It’s not something that has just cropped up. A lot of other municipalities are scrambling to try to cover short falls in their budgets, and to that extent the city has done a good job of keeping us ahead of potentially bigger problems. But during that four year period of decline from 2007 to 2010, the city actually increased its property tax revenue. City Mayor C. Scott Davis, in a recent meeting, stated that local government has very limited taxing authority and really can only generate revenue through the meals and property tax rates. He is right.

There are, however, other ways the city can affect the budget’s bottom line.  It’s called a balanced budget because you have to balance income against expenses. It’s an equation; a two way street, not one way. Simply increasing the tax rate is one way to get there, the other way is to reduce expenses. The current solution only looks at one side of the equation.

Take the situation in Powhatan County, for instance, where the very same lower real estate assessments left a $6 million deficit in the county’s budget. Their response to covering that revenue loss was twofold: they upped the real estate tax rate by 14 cents, and looked into their own budget for additional ways to make it balance.

One way they opted for was to cut 10 positions, each position was worth an average of $50,000 per year.  The cuts include not filling open positions, and, unfortunately, laying some people off. How many will eventually be let go is still up in the air, but county officials have gone on record stating that the cuts have little or nothing to do with job performance. What they are looking at is areas in which the county is overstaffed.

In Colonial Heights, City Council has tried to weather the weakening economy without having to lay anyone off. They have done a great job of doing so, but maybe they should look at other contingencies in case the economy continues to falter, or if their changes to the meals tax rate keeps people from dining out in the community.  At this point, it would be difficult to come back to the community and try to hike taxes again.