Northern Virginia officials hope to offset the effects of inflation, a robust housing market and other economic forces that have driven up living costs by either lowering or freezing housing tax rates – an effort that critics say is not enough to help some residents get past .
Alexandria City Council, which is voting on its budget next week, appears to be leaning towards freezing its tax rate. Loudoun County reduced it by 9 cents per. $ 100 earlier in the month.
Local government leaders mentioned concerns about the tax implications of rising housing valuations, as well as the increased values of cars caused by global disruptions in car production.
Residents of the area “see the cost of living rising and rising beyond our control,” Fairfax Supervisor Dalia A. Palchik (D-Providence) said Tuesday before her board voted 9 to 1 to approve a $ 4.8 billion spending plan that would lower tax rate to $ 1.11 per. $ 100 of assessed value when formally adopted next month.
The national inflation rate is the highest in 40 years, while petrol prices have also risen after the war in Ukraine caused NATO countries to cut back on Russian oil imports. But the tax cuts – plus tax relief programs that have recently been expanded to help more vulnerable residents – will mean millions of dollars in lost revenue for local jurisdictions, at a time when the region is still working to recover from the economic downturn caused by coronavirus pandemic.
Some residents and local civic groups seeking less public spending noted that even with tax freezes and cuts, residents will still see their annual tax bills rise – with an average of $ 395 in Arlington, for example, and $ 465 in Fairfax.
The average selling price of homes in the region is up to $ 650,000 compared to $ 519,000 in 2019, according to the Northern Virginia Association of Realtors. Some residents have seen their property tax estimates rise by as much as 20 percent in the past year, said Arthur Purves, leader of the Fairfax County Taxpayers Alliance, a longtime critic of county spending decisions.
“It’s really hard for those of us who are retired who live on fixed incomes,” Purves said.
Robert Marino, president of the Oakbrook Community Council Homeowners’ Association in Fairfax, told the county board during a public hearing this month that some homeowners in his community have seen their ratings skyrocket due to the turbocharged real estate market, where several bids for a house have driven values up.
“I’m not exaggerating when I say that our community is uniquely and unfairly affected by this significant increase in valuations,” said Marino, who said he saw the valuation of his house go up by $ 135,000 this year, the board said. “This translates into a unique and unfair impact on the taxes we will be forced to pay.”
Several jurisdictions sought to balance these realities with a push to increase spending in areas geared toward economic recovery.
On Tuesday, Fairfax’s board, which had the luxury of a $ 96 million profit – after higher-than-expected revenue and some cuts made earlier in the fiscal year – agreed to direct $ 10 million to affordable housing.
The county board has also managed $ 6.1 million to pay increases for public security personnel hired before June 30 last year, a move that should solve recruitment and retention issues in a police department where morale has been low.
In a first for Fairfax County, personal property taxes on cars were based on 85 percent of the vehicle’s estimated value instead of the full amount, in recognition of the increasing value of cars. To help cover these expenses, the board reduced its allocation to county schools by $ 10 million – a step agreed by the school board in advance – and reduced additional county prosecutors by six positions to a $ 804,000 saving.
“The theme I have established in my own mind for this budget is balance,” Jeffrey C. McKay (D-At Large), chairman of Fairfax’s board of directors, said during Tuesday’s meeting. “Balance between much-needed services in the county, investment in our public servants and an understanding of the economic burden, such as soaring high valuations, soaring car values, inflation and other things that affect the residents of our community.”
Arlington’s $ 1.5 billion budget, which the board was expected to approve Tuesday night, represents a 7.6 percent increase in spending compared to last year, the majority of which would be for education funding and salary increases for county employees.
The county’s school system will receive an additional $ 54.5 million, or 10.2 percent, compared to last year’s budget, for a total of $ 584.4 million.
Most county employees would receive merit increases of 5.25 percent. Firefighters and the sheriff’s deputies would receive an 8.5 percent pay rise, and police officers would see a 13.5 percent increase.
In a letter to Arlington residents, which was part of his budget plan, County Chief Mark Schwartz said the increases were intended to signal “to our workforce the importance of their efforts”, especially given the rising cost of living and these employees frontline action throughout the pandemic.
But with the region’s economy recovering, rising housing values and higher tax rates are likely to be a fact in the coming years, real estate experts say.
With mortgage rates still relatively low and the pandemic pushing more people to seek larger homes that can serve as jobs, the suburbs of Washington will continue to experience strong sales, said Ryan McLaughlin, executive director of the Northern Virginia Association of Realtors.
“We do not expect any kind of price drop to necessarily happen in the near future,” McLaughlin said. “Demand is too strong in our region.”
Fairfax County Supervisor Daniel G. Storck (D-Mount Vernon), whose district includes palatial houses overlooking the Potomac River, a short drive from mobile home parks, said reality points to an even greater need to address it. severe shortage of affordable housing in the region.
Without that long-term commitment, “we will erode this county in a way that is not what any of us want,” Storck said.