Despite Property Tax Growth, Cities Struggle to Balance Budgets
While real estate assessments across the country are trending up, some cities, such as Roanoke, Va., still have a tough time balancing the demands of municipal budgets, according to the Roanoke Times.
City sees asset growth after six-year slump
In a recent Roanoke City Council meeting, it was announced that real estate values for the city of 100,000 residents will increase by 3.03 percent for the upcoming fiscal year. It’s an increase of $215 million in real estate assets for a new total of $7.3 billion in real estate.
The growth is good news, particularly after a six-year streak of declining values beginning in 2009, and attributed to the Great Recession. More recently, growth for residential properties had been modest, with one percent last year and 2.65 percent for the current fiscal year. Response to the new 3.03 percent growth, as well as an all-time high median home value of $142,000, increasing home sales, and decreasing foreclosures, was optimistic but measured.
“It really just doesn’t get better than that,” Roanoke’s Director of Real Estate Valuation Susan Lower told the city council. Lower cautioned that while the trend was going in the right direction, local market volatility remained.
Net increase falls short of anticipated demands
However, the good news was tempered by other budget concerns. Director of Management and Budget Amelia Merchant reportedly told the meeting the real estate tax increase is expected to add $2.46 million in new revenue. However, a $500,000 decrease in personal property tax revenue and flat business license taxes will eat into that total. Gains for sales and meals taxes were expected to be a modest 1.5 percent.
According to the article, Merchant reported net local tax revenues would only increase by 1.3 percent, or $2.5 million. Forty percent of that revenue is automatically allocated to local schools, while another portion is absorbed by the regional tourism bureau. The remaining $1.5 million in additional revenue was then reported to be insufficient to cover nearly $1 million of anticipated increases in mandatory spending and $1.9 million for a two-percent salary increase for public workers.
The article reports the council members debated where cuts could come from without reaching an answer. However, a new construction dumpster policy was approved which could add revenue to coffers in the form of new monthly and daily parking fees.