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Morning Poll: Tax Rebates for Arlington Property Owners?

by ARLnow.com — October 23, 2012 at 9:55 am 4,029 85 Comments

Republican County Board candidate Matt Wavro has an idea for the millions of dollars of unspent tax revenue typically left over at the end of the county’s fiscal year.

Instead of simply finding a way to spend the money or putting the money in reserve, as Arlington County does now, Wavro wants to see the “close-out funds” returned to county residential and commercial property holders in the form of a tax rebate. As the Sun Gazette reports, Wavro presented the idea at the County Board meeting on Saturday, saying that the county should provide tax relief after years of tax rate increases.

How do you think excess county tax revenue should be used?

  • Chris Petrilli

    First, Arlington taxes are still lower than anywhere else in the region as far as I know. Second, one of the things I like about living in Arlington is that the government tends to be aware of the fact that economies are a cycle and puts money away for future downward cycles rather than pretending it’s always going to be great. Lastly, the actual amount that would be rebated would be $100-200 on average, which is in the gimmick level of money, not useful levels of money. Those that could actually USE the money would actually likely get less than that.

    • DCBuff

      You must live in Arlington, TX.

      • drax

        It’s true – the lowest in NoVA (not the whole region).

        • DCBuff

          There you go again drax, without providing facts. We all know our tax rate is lower due to higher property values, which can still mean higher taxes. And, where is it that you see ArlCo being “aware” of economic cycles? If that were the case, they’d not be pushing the trolly and the LB pool right now. That is what my response was to.

          • drax

            The tax RATE is among the lowest in NoVA. If you want a link, I’ll go get it (again). Your taxes may be high, but that’s because you own valuable property. Just FYI.

          • South Awwlington
          • AH

            That’s not really how they do it. After I appealed the county’s first tax appraisal of our house, they sent me a letter telling me they’d “appraised” our property by comparing it to two properties with huge garages, twice as much land as we have, brick instead of wood, and numerous other differences. Not only are those two properties not comparable to ours, but also they had apparently added about $300,000 to those homes’ Arlington government appraisal values, and that was the number they decided ours was worth. After our appeal the next tax bill was for a $3,000 per year increase, so we sure didn’t appeal their non-logical appeal decision!

            They say our property is “valuable”? Valuable my foot; the Arlington county government decides that “value” itself. It simply “compares” our properties to the other appraisals they have created for other properties in the county – “values” thus all within their discretion. I asked, but the appraisers would not give me any actual mathematical formula consisting of structures square footage, number of bathrooms and bedrooms, age of home, historical significance if any, five recent comparables, land square foot measurement, etc.

            (When I called they could give me no explanation for why they had added $300,000 or so to those larger properties’ values to compute our home’s value. The appraiser did tell me that the size of the lot is not important to him).

          • DCBuff

            Wow. That was really helpful for you to restate what I had already said. Taxes are high not simply because I own “valuable property” but because ArlCo chooses to tax it highly to feed an insatiable spending appetite.

          • drax

            No, ArlCo does NOT tax it highly. Tax rates are among the lowest in NoVa.

    • redstang423

      I could find many uses for $100-200. If you can’t, I’d be happy to take your rebate.

    • JamesE

      $100-200 is a lot of gas for my car which is taxed so heavily. Or just a weekends worth of beer and wings, totally useful.

      • SomeGuy

        At the revs you push your vehicle up and down Fairfax Drive for a cause, I can imagine $100-200 wouldn’t last you long.

        • JamesE

          8/17 only once a year, never forget

    • AL

      Agreed 100%. They should be putting this money away, instead of waiting until they come across financial difficulties, and then cutting important programs and raising taxes.

      • David M

        As if there are no unimportant programs to cut.

    • David M

      Since when is $100-200 gimmicky? That’s a lot of money that could be in the economy.

  • Not so fast my friend…

    These are politicians. This would immediately motivate them to spend the money before the end of the year, potentially on more frivolous items. “Use it or lose it!” Putting it in reserve might actually allow them to use it on worthwhile items. Or even better, put some % into reserve, and return the rest. That way they wouldn’t feel motivated to spend it all, some would go to an emergency fund, and the rest would come back to us.

  • coppa

    Sounds like someone trying to buy my vote.

  • Emergency fund

    Why not apply it to your taxes for the following year as a credit? Less paperwork.

    And what’s wrong with having an emergency fund? Is everyone supposed to be teetering on the brink of debt?

    • jan

      agree

  • ChugALug

    If he wins, free kegger!

  • arlmimprov

    Arlington County does not have a “Homestead Exemption’ like the District of Columbia which protects long time homeowners/retirees, etc. from skyrocketing property tax due to outrageous home appreciation. Retirees that purchased their homes for $60k on modest salaries are now sitting on properties worth $1million and can’t afford to pay the property tax on the home. The District protects long-time homeowners from this scenario. We benefited when we lived in the District.

    Accordingly, a tax rebate is warranted.

    • TLC
      • arlmimprov

        This was meant for you- it posted below:
        DC does not have an age limit. We were able to claim ‘homestead exemption’ in our early 30s.

        DCs Homestead Exemption ACT:

        This benefit reduces your real property’s assessed value by $67,500 prior to computing the yearly tax liability.

        The Homestead benefit is limited to residential property. To qualify:

        An application must be on file with the Office of Tax and Revenue;
        The property must be occupied by the owner/applicant and contain no more than five dwelling units (including the unit occupied by the owner); and
        The property must be the principal residence (domicile) of the owner/applicant.
        If a properly completed and approved application is filed from October 1 to March 31, the property will receive the Homestead benefit for the entire tax year (and for all tax years in the future). If a properly completed and approved application is filed from April 1 to September 30, the property will receive one-half of the benefit reflected on the second-half tax bill (and full deductions for all tax years in the future).

        • Observer

          Arlington also has a program for property tax deferment and exemption for seniors. It’s part of the County Code.

          • arlmimprov

            Again, DC’s act is for all ages. It is not just for ‘Seniors’.

          • drax

            We used to have it for everyone, but killed it during the recession.

          • AH

            Well, that’s the difference. For non-seniors, such as young families, whose taxes jump, there is no relief.

  • novasteve

    No!!! the money must be redistributed, not given back to the people who paid the money! VIVA MARXISM!

    • drax

      So steve, when there is a surplus, we always give rebates. Does that mean when there is a deficit, we always raise taxes?

    • Rory of the Hills

      Wait, so now workers control the means of production? I think we read a different article.

  • South Awwlington

    The money isn’t the County’s. It should go back to the property owners….regardless of what that tax rate here is versus that on the Moon.

    • kevin

      why is it the property owners? Why are renters left in the cold. Renters paid 100-200 more in rent over a year to help cover the owners supposed expenses, why should owners now be entiltled to money the county didn’t end up using.

      Put it away for the future, fair and practical!

      • DCBuff

        Renters benefit when owners taxes are held in check. Property taxes are a cost passed on, so you benefit. And, if you don’t like renting, buy, don’t gripe about paying rent.

      • redstang423

        Owners take all the risk by OWNING the property. They risk their capital if the housing market crashes. They risk the renter destroying the property (good luck actually collecting actual damages in most cases). They risk having a month or two of vacancy between renters. They risk the unexpected costs of fixing the HVAC system, appliances, etc. As a renter you have no risk (or very little risk) by renting. You didn’t directly pay into the real estate tax system, so you shouldn’t expect any benefit of any potential real estate tax rebate.

      • South Awwlington

        @Kevin – if you want the benefits of property ownership, OWN PROPERTY.

        • kevin

          Thats just it.. The 200 back wasn’t a percieved benefit to property ownership.

      • drax

        Kevin, you want a tax rebate for taxes you don’t pay?

      • Greg

        Renters are left in the cold? You let me know the next time you stroke a $7,000 check for rental tax.

        Unbelievable.

        • kevin

          The monthly amount you pay for your house has nothing to do with giving back any extra money to Arlington’s citizens in a fair way that doesn’t favor one demographic ( ie. homeowners)

          Also, I’d bet the same house you purchased rents for a similiar amount especially after the amount of your payment that goes into equity is subtracted.

          • redstang423

            Real estate taxes are only paid by owners. Not renters. If real estate tax money is returned, it seems very fair to give back the extra money to those who paid into it in the first place.

          • Citizen

            Ha! Ha! Ha! Great joke.

            Of course renters pay for the real estate taxes via their monthly rent check.

          • redstang423

            No. Renters pay for the privilege to occupy a dwelling with no worry of general upkeep of the property beyond normal cleaning. The owner of the property pays all related expenses, including real estate tax.

          • Greg

            It would. Do you think prospective tenants would pay for the $10,000 roof repair project underway?

            You want the benefits of owning without any of the downside or responsibility.

  • Wiz

    How about both? Maintain an emergency fund equal to maybe 5% of the budget, then return the rest?

    • DCBuff

      A contingency fund already exists. A key question is whether we trust the current tax and spend board to not just spend when there is revenue in excess of that needed to fund the adopted budget.

      • Observer

        They can’t just spend away that surplus. They built it up to help maintain our AAA credit rating, which now carries a “negative outlook” according to Moody’s because of the federal spending uncertainty. The large reserve is helping us cling to that AAA rating, and if it goes away in any substantial fashion the rating likely drops, which will impact Arlington’s ability to continue their debt financing.

        Very clever by Wavro.

        • GC2

          So you mean it might discourage the trolley & aquatics center boondoggle / vanity project due to high interest rates? Sounds like a great plan to me. Wish we knew the FICO scores of our county board – then it would all make sense.

        • Ricardo

          I think it would be awesome if Arlington couldn’t borrow any more money.

  • drax

    So in years when we have a deficit, will Wavro agree to an immediate tax INCREASE to cover it too?

    • PaulB

      Trick question, Arlington would never run a deficit.

      • drax

        Nice dodge of the question.

        If we are facing a deficit, does this mean we should always raise taxes?

        • PaulB

          Not a dodge at all. The county is prohibited by law from running a budget deficit.

          • drax

            Sigh.

            Let me try again.

            If the county is facing a possible deficit, should it always raise taxes, or cut spending, or rely on reserves?

            If one believes a surplus should always result in rebates, that would mean a deficit should always result in tax increases.

          • PaulB

            Sometimes they do all of the above.

            Is that the answer you were looking for?

        • DCBuff

          Dealing with a “deficit” does not require raising taxes; expenditures could be lowered/not raised as much. I mean theoretically, of course, as this is ArlCo.

        • Right of Center

          Arlington’s finest could just issue more parking tickets

  • JimPB

    A reserve or contingency fund is usually desirable in case an unexpected but necessary expense(s) arises.

    Questions:
    Is there “authoritative” or “good practice” guidance for local governments about the amount of a reserve or contingency fund? If so, what is that guidance? (Note: If I understand and recall correctly, the City of Falls Church strives to maintain a reserve or contingency fund of about 7% of the current budget for expenditures. What about Fairfax County?)

    What % of the most current ARLCO annual budget for expenditures is the reserve or contingency fund?

    What has been ARLCo’s historical experience in tapping reserve or contingency funds? When, for what, and amount ($s) involved?

    How rapidly could ArlCo arrange a loan OR authorize and sell bonds in the event that an unexpected MAJOR expense should arise? If a substantial amount of money could be readily obtained through a loan or sale of bonds without incurring substantial expenses, then the reserve or contingency fund could be less.

    • Observer

      That’s a lot of questions.

      I believe the reserve is around 3.75% of expenditures currently, and the county has stated they would like to raise that to 5%. I think the reasoning for that is most likely related to the $1.2 billion CIP plan you may have read about here, which forecasts spending through 2016.

      • South Awwlington

        City of Alexandria’s CIP is also north of One Billion, but runs through 2022. Our is only through 2016 at 1.2B. We’re all aware of budgetary misgiving “if I don’t spend all my money, they’ll give less next time.” I am afraid in some ways Arlington subscribes to this belief. There are some infrastructure projects that are needed to keep our community moving, both goods and people. There are also some projects that would be NICE but not essential, IE lazy rivers and million dollar dog parks (I do swim and I do own a dog).

        I don’t know that a County only 26 sq miles in size needs an operating budget of over One Billion dollars. It seems excessive.

        • mass hysteria

          Don’t tell that to Manhattan.

          • AH

            Thank God we’re not Manhattan. Although planners seem to think we want to raise our kids with exactly that many tall buildings, traffic and smog.

    • redstang423

      If some “MAJOR” expense suddenly arises completely unforeseen that is far outside of any budget or reserve, it would almost certainly be due to some type of disaster or attack, in which case state and/or federal governments would be providing assistance. When you consider one lone condo building in Clarendon generates over $2 million in real estate tax revenue, and the total budget for ArlCo is about $1B, that would have to be a pretty massive surprise expense.

  • arlmimprov

    DC does not have an age limit. We were able to claim ‘homestead exemption’ in our early 30s.

    DCs Homestead Exemption ACT:

    This benefit reduces your real property’s assessed value by $67,500 prior to computing the yearly tax liability.

    The Homestead benefit is limited to residential property. To qualify:

    An application must be on file with the Office of Tax and Revenue;
    The property must be occupied by the owner/applicant and contain no more than five dwelling units (including the unit occupied by the owner); and
    The property must be the principal residence (domicile) of the owner/applicant.
    If a properly completed and approved application is filed from October 1 to March 31, the property will receive the Homestead benefit for the entire tax year (and for all tax years in the future). If a properly completed and approved application is filed from April 1 to September 30, the property will receive one-half of the benefit reflected on the second-half tax bill (and full deductions for all tax years in the future).

  • GreatRosslynDriver

    Maybe I don’t understand how the taxes that are collected are distributed (I’m only a renter after all), but the article didn’t specifically say that excess property taxes should be returned in the form of a rebate, but excess taxes. Aren’t there other taxes collected? If that is the case, why should only property owners get the rebate? I’d much prefer to see any excess go to a reserve.

    • Greg

      Sales Tax hasn’t been increasing.

      Property Tax rates and the underlying values have.

      Seems fair to me.

    • TLC

      That’s a good point: The article is talking about “leftover tax dollars,” and says nothing of real estate taxes, specifically, until Wavro injects it.

      While property taxes are the largest single source of revenue for the County, they still only account for 53% of total revenue. If the surplus were to be refunded, why should 100% of those rebates go to property owners, despite only accounting for 53% of revenue?

      http://www.arlingtonva.us/departments/ManagementAndFinance/budget/file81355.pdf

      How about carrying the balance over and using it to offset a one-year reduction in hotel taxes in hopes of boosting tourism? Or doing the same to offset a one-year reduction of commercial property taxes in hopes of filling up office space vacated because of BRAC (Crystal City, Rosslyn, etc)?

      In that way, the money could be used to invest in Arlington, spurring economic growth which could, theoretically, result in a long-term reduction in real estate taxes, rather than a one-time “rebate.”

      • JohnB2

        I’d rather they repeal the extra 4% restaurant tax for a while instead.

      • DCBuff

        You raise an interesting point. I would suggest that the money, assuming a refund, not go to a limited, special interest group (e.g., hotel operators), but to the widest group of citizens. If not a prop tax rebate, then how about doing away with the car sticker, which is just another tax, but one we can’t deduct? Conveniently, this feeds into another discussion going on today.

  • John Fontain

    How about using unspent money to pay down county debt?

    • DCBuff

      No, John, we need to borrow more! Otherwise, we will not be a worldclass community. No one will want to live here if we don’t have the Artisphere, the trolley folly, the LB pool, etc. After living here for 25+ years, I will actually move to the mythical land where all this exists if we don’t have it in ArlCo!

      • AH

        LOL. +1.

    • drax

      Yes, how about that.

  • BillyC

    Arlington has one of the lowest tax rates, but one of the highest average home prices – which means we pay higher taxes than most in the region. What did Bill Clinton say, it’s math.

    Our reserve funds are currently maintained at 5%. Every penny over 5% should be rebated on a pro-rata basis. The board counts on this money every year to spend outside the budget process on pet projects. It’s under the radar and without much public comment. If the projects are that important, they should go through the regular budget process.

    • JimPB

      Examples, please, of recent spending on “pet projects” from excess contingency or reserve funds?

  • Rory of the Hills

    With the extra money we should build a real cool dive bar that allows smoking and only serves good microbrews.

    Novasteve, do I have your support?

    • DCBuff

      Finally, a project that we all can support!

    • AH

      +1.

  • JimPB

    What specific reductions or eliminations does Mark Wavro (and others) propose in current ARLCo expenditures?

    • brown before green

      Thanks Jim, that’s the million dollar question.

      • Tobe

        It’s actually the $70 million question. As in he opposes the aquatics center, estimated to cost around that much.

  • Dyan Smith

    Why don’t the democrats think to refund the money back to the people?

    Our one sided board make me nuts. I will never understand why people stand for it. There is no accountablity when there isn’t a balance. It has been at least 15 or more years since we have let this one sided nonsense keep money that “most” people could use.

  • Andrew

    How about this: One-third new spending, one-third savings, and one third of the money goes for a rebate? Or is that too many “slices” of the pie?

  • No real property ownership…

    If you really owned your property, you wouldn’t have to pay taxes on it. We’re just tenants.

    • AH

      “Really owned”? You mean, like sovereign nations or Indian tribal lands?

      I thought we pay taxes in exchange for the benefits of citizenship. Like paying tolls so you can use a road. The property-owning population pays property taxes and the government will provide fire department assistance if the house starts burning down, police assistance if vandals wreck the property, road maintenance so we can drive to our properties, street lights, etc. That sort of thing.

      I hate the high assessments in our county, although I don’t object to taxes in principle. Just never had to pay such high property taxes where we’ve lived before.

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