Dear Legislator:
On behalf of the taxpayers represented by the organizations listed below, we urge you to reform the way property is taxed in Virginia. As the ballooning assessments and soaring property tax bills of recent years have demonstrated, the existing "current market value" system can create uncertainty and hardship for Virginia's taxpayers. One way to address this problem would be to amend the Virginia Constitution so that taxes are based on the acquisition value of the property. Adoption of House Joint Resolution 559 would make just such a change, and we ask that you support the resolution when it is considered by the House Privileges and Elections Committee.
Over the past six years, Virginia homeowners have been hit with higher assessments driven by a housing market boom. This is especially true in Northern Virginia, along with the areas of Charlottesville, Hampton Roads, Harrisonburg, and Richmond. In some places, the average 2006 property tax assessment increase topped out at 28 percent! Needless to say, most residents did not see a corresponding increase in income to pay those taxes.
Despite a cooling housing market and a slowing of increased assessments, Virginia homeowners are still dealing with the repercussions of the recent run-up. Although many localities trumpeted their decision to cut tax rates in light of the increased assessments, rarely did such moves result in an actual cut in the amount of taxes paid. As Dr. John Knapp of the University of Virginia has summarized:
Obviously, Virginia local governments have taken advantage of the housing boom to increase tax collections. Theoretically, local governments did not have to set rates that would yield large gains in revenue. They could have adjusted their rates downward so that tax collections would not grow rapidly. In fact, many cut their rates, but because of the inflation of residential values, tax levies grew strongly even with lower nominal tax rates.
Incredibly, taxpayers are now being warned by local governments that tax rates will actually have to increase this year to sustain the new spending programs that devoured the recent windfalls from rising assessments. Because of the volatile current market value system and the lack of any meaningful caps on tax rates, most Virginians are left with two stark choices: pay their sky-high property tax bills or abandon their homes. Taxpayers deserve a more rational approach.
While there are many sound proposals for tax reform in Virginia, we support House Joint Resolution 559 as one good option because it calls for an acquisition value-based property tax system that limits both the increases in assessments and any increases to the tax rates. In particular, the proposal would 1) limit the annual increase in property value assessments to 1 percent plus any percentage increase in the rate of inflation until a property is sold, at which time the property value assessment is adjusted to the fair market value, and 2) limit annual property tax rate increases to 1 percent of the previous year_s tax rate.
This common-sense proposal would provide greater certainty for Virginia's families while still providing localities with reasonable rather than excessive revenue growth (based on population flow and limited rate/assessment increases). We look forward to working closely with you to pass House Joint Resolution 559.
Sincerely,
Bud Miller
President
Alexandria Taxpayers United
L. Whitney Duff
Director
Americans for Prosperity- Virginia
Tim Wise
President
Arlington County Taxpayers Association
Warren Bruce Jones
Leonard T. Harris
Chairman
Libertarian Party of Henrico County
John Berthoud
President
National Taxpayers Union
Jim Vogt
President
Taxpayers for Accountable Government
Loudoun County, VA
John Taylor
President
Tertium Quids
Al Aitken
Chairman
VOTORS