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Shortfall could lead to tax hike

JAMES CITY -- County projections badly overestimated the amount of new residential construction in the 12 months that ended June 30. The miscalculation, which surfaced Friday when annual reassessment data was released, means revenue will be short an estimated $2.3 million.

That leaves county leaders with two options, neither very palatable 2-1/2 months before voters go to the polls to elect three county supervisors: slash county spending or raise real estate taxes before the next budget to cover the shortfall.

Berkeley supervisor Jay Harrison, who is not seeking re-election, said it's the first time in his eight years as a supervisor that the county land book has come up short of projections.

"If you don't increase the tax rate, there will have to be adjustments somewhere," he said Friday from Las Vegas, where he is vacationing. "Revenue is going to have to be found somewhere."

According to director of real estate assessments Rich Sebastian, the county predicted that residential assessments would increase 4%-5%. Those hit the mark with the average increase about 4.8%. Some neighborhoods will endure drastically higher spikes, namely Gate House Farms, where assessments rose an average of 28%.

"The higher end properties are appreciating at a much slower rate because it's a much smaller market," Sebastian said. "The $200,000-$300,000 houses are appreciating much faster because they're our primary market and they're in higher demand."

Also rising are residential home values in Stonehouse, where supervisor Andy Bradshaw is running for re-election. Among the 10 neighborhoods with the biggest increases in home values, seven were in Stonehouse District.

Sebastian blamed the drop off in single-family residential building and the general slow-down in the housing market for the land book shortfall. He said the county anticipated the market slow down, but not to this extent.

"We expected about a 13 percent increase in the land book," he said. "It really came out to be about 9 percent."

Last year, the total assessed taxable value of all property in James City came out to $9.8 billion. A 12% increase would have raised that value to just over $11 billion. Instead it totaled about $10.8 billion.

"That percent difference is going to cause a shortfall in the budget," Harrison noted. "We estimated at 13 percent, so now the issue is where are we making up the difference."

There's speculation that the county will cut spending immediately. A tax increase would be more likely next year.

Former supervisor Jim Kennedy, who is challenging Bradshaw in Stonehouse, has suggested waiting for the land book to be completed before approving an operating budget. That would eliminate formulating a spending plan on revenue that won't materialize.

Roberts supervisor Bruce Goodson is pushing the same idea.

"We're having to budget with an estimate and then have to go and figure out where we're at," he said. "My belief is that we should do the land book earlier and budget on what we've really got, just as York County does."

Goodson said when the issue goes before the supervisors, he won't support a tax increase. His position is that the county should tighten its belt and cut spending to make up for any shortfall. It's also his hope that this situation will force the county to re-evaluate its system to prevent a similar shortfall in the future.

More -- A public hearing on real estate assessments and the property tax rate will be held at 7 p.m. Tuesday, Sept. 25, in Building F of the County Government Complex, off Mounts Bay Road. Property assessment reviews may be requested through Sept. 26 by calling 253-6650 weekdays between 8 a.m. and 5 p.m.

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Shortfall could lead to tax hike

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