When a tax ''cut'' is really a massive increase


Do politicians wake up in the morning and say, "What can we tax those idiots for today?" Apparently they do in Alexandria, where Democrat Mayor William Euille said, "I was just sitting in my car at the intersection. I looked around at 15 or 20 other cars, and everybody had a cell phone." Now they've passed a $3 a month cell phone tax. (emphasis mine)

The City Council approved a new tax on cell phones as part of the fiscal 2006 budget. It will help make up some of the money that the city will lose after the real estate tax rate was lowered in order to provide relief to homeowners. Residents will see the new charge on their cell phone bills starting in September.
So Alexandria lowered their property tax rates and is losing money, right? They have to make up that lost revenue from somewhere right? That must be the case, because even the Washington Post headline declares: "Alexandria to Tax Cell Phones as Other Revenue Drops". Sounds serious, doesn't it?

Indeed, the Post reports as though Alexandria is losing money hand over fist:

Other measures passed to offset the real estate tax cut include a 20-cent increase in cigarette sales tax and a new entertainment surcharge on items such as movie tickets.

Taxing the growing number of cell phone users should help offset the losses created by a reduction in the real estate tax rate, Mayor William D. Euille (D) said.

Oh, woe is me. We cut the tax rate and now we're going to go bankrupt! Right? Wrong. It's all bullshit.

Check out Alexandria's dirty little secret when it comes to property taxes. If you want to know why they passed the property tax "cut", you need to look no further than press releases on their own government web site. (emphasis still mine)

For calendar year 2005, the overall assessed value of real property. . .increased 21.2%.

"This overall increase reflects the strength and health of the Alexandria economy, and the continued demand for both rental and owner-occupied housing in the City and other urban jurisdictions close to the District of Columbia," said Mayor William D. Euille. "The City Council recognizes the increased burden of the higher assessments on residents and will take this into consideration when reviewing next year's budget and the real estate tax rate," he said. . .

The overall value of the City's residential real property tax base increased in 2005 by 22.9%. New residential construction accounted for $206 million of the $3.03 billion increase; appreciation accounted for remaining $2.82 billion of the increase.

The average assessed value of an existing residential home (single family and condominium) increased 21.3% in 2005.

o The average assessed value for an existing single family home (single family detached and townhouses) as of Jan. 1, 2005, is $563,092, increasing 18.6% over last year's assessed value.

o The average assessed value for an existing residential condominium as of Jan. 1, 2005, is $287,765, increasing 28.8% from last year.

o Notably this year, the average high rise condominium increased 32.6% from $209,829 to $278,296.

They cut the tax rate a eight cents because housing assessments were increasing nearly 30% a year, every year. They even point out that "average assessed value of an existing residential home increasing 131% since CY 2000." That means that since the year 2000, tax bills have more than doubled.

The tax "cut" that the Post is referring to is the 8-cent cut in the tax rate (from 99.5 cents per $100 to 91.5 cents) that was just passed. The Washington Post called this a "revenue drop", but just last month they noted that tax bills will still rise by leaps and bounds.

"Alexandria officials trimmed the city's tax rate by 8 cents, but that will soften the increase -- still hefty at $418 on average -- only slightly"
How that qualifies as a "revenue drop" is a mystery that only liberals can understand.



Comments (1)      top   link me

Comments

An entire class of people view taxes not as undesirable necessities, but progressive tools.

They don't value individual liberty, no matter how they spin their conceited lies.

Thieves.

Posted by: Brett at June 18, 2005 4:14 PM

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