The Commonwealth has a rule that whenever real estate assessments rise more than 1 percent, but tax rates don’t fall to offset that (to within one percent), local governments have to publish a notice explaining that. Just a simple bit of algebra to say, here’s the tax rate that would have offset that assessment increase. Here’s what we’re actually proposing to charge. And here’s the difference. It’s just a way to make sure that citizens know how much their taxes are increasing.
I hate to have to be the one to say this. But the Town just put out such a notice. And their arithmetic is wrong. Grossly incorrect. I checked similar notices from three other jurisdictions, just to be sure that I was doing the calculation right.
And you know why I hate that? Based on recent history, the most likely outcome is that, instead of just correcting their algebra, the Town will offer the usual bafflegab as why this unique Town of Vienna algebra is fully justified. (And then quietly correct it.)
Let me be clear: There is obviously no intent to deceive, because, clearly, nobody pays the slightest attention to this notice. Surely nobody within Town government, and I would guess, nobody (but me) outside of it. I checked an earlier year, and I’m pretty sure their calculation has been wrong for some time now.
That said, at some level, this is all of-a-piece. Five floors is really four floors. A building the size of a football field preserves “small town” Vienna. And a 5.6% increase in taxes is actually a 3.1 percent tax cut. It all meshes together.
Detail follow.
Here’s the notice of the proposed real estate tax increase for Vienna (.doc file). The gist is that the rate is unchanged at $0.225/hundred, but assessments will rise an average of 5.6%. And the Town’s total (operating?) budget is going up a bit over 6%.
The point of the Commonwealth’s requirement is to make it clear to the citizens how much their tax bills are going up. It requires local government to combine both the increase in assessments, and any changes in tax rates, into a single number. And if the average tax bill is going up something like 5.6 percent this year, then that’s what the listed tax increase should say. Really, truly, it’s not rocket science. Putting that figure out for public inspection is the entire point of this exercise.
Which is why, when we’re going to get an average 5.6% tax increase, having the Town put out a notice that says we’re getting a 3.1 percent tax cut is a material error. I know it’s just algebra, and so on. But saying that misses the entire point of why the Town has to do this.
Here are similar notices from Rockingham County (.pdf), Arlington County, and the City of Charlottesville. These are just the first three I came across. I use them as my “control group” to make sure there isn’t some obscure legal issue that muddies the arithmetic. (There does not appear to be.)
Linked below is my spreadsheet that checks the calculations for these four announcements, side-by-side. Same formulas. Same methods. Taking the data directly from each announcement, and occasionally having to go to a website to find the current tax rate. Three check out. One does not.
Here’s a link to the spreadsheet. And then, a picture of the resulting table. I think you’ll need to open the spreadsheet to be able to read the table.
As always, if I have gotten something materially wrong, please let me know (chogan@directresearch.com) and I will publicly correct my error.
Algebra Check, 2019 Tax Increase, v2
