The Virginian-Pilot
©
VIRGINIA BEACH
That $48 million hole in the city budget? Blame some of it on SUVs.
This flat, fair-weather city by the sea has among the state's highest percentage of the gas guzzlers outside Northern Virginia, an analysis of Department of Motor Vehicles' data shows.
As gas prices soared, demand for SUVs slacked and values plummeted. So did owners' car tax bills - good for owners, not so for city coffers.
Beach budget officials predict a $15 million shortfall in personal property tax revenue this year and $23 million in the next fiscal year. Vehicles make up about 80 percent of the tax, the second-biggest revenue generator behind real estate.
It's hard to quantify the exact SUV budget impact, officials said, but 42,071 of the city's 350,636 vehicles - 12 percent - are SUVs. Only Fairfax County has more of them.
SUVs "became the modern family station wagon, an alternative to the minivan," Tom Barton, president of Beach Ford, said Tuesday. "People would rather be seen driving an Explorer than a minivan. It was an image thing."
Chesapeake has 19,700 SUVs, 11 percent of vehicles in the city. Car tax revenue is expected to be down this year by about $3.8 million, said Ray Conner, commissioner of revenue.
SUVs in Norfolk, Portsmouth and Suffolk make up 9 percent of total vehicles.
In Loudoun County, SUVs account for 16 percent of vehicles, the highest percentage in the state. The county is facing a $3 million shortfall in personal property tax revenue.
"It's another hit localities have to take," said Robert Wertz Jr., Loudoun County's commissioner of revenue, who said he recently replaced his Ford Explorer with a small Honda.
Many SUVs are worth 40 percent less now than last year, according to the National Automobile Dealers Association value books, the source for car tax assessments.
For example, the value of a 2004 Ford Excursion in Virginia Beach fell from $25,975 in January 2008 to $15,300 a year later, a 41 percent plunge. That's $274 less in tax revenue. A 2000 Chevrolet Tahoe in the Beach dropped from $7,125 to $4,350, a nearly 39 percent drop representing $36 in taxes.
Virginia Beach Commissioner of Revenue Phil Kellam, whose office collects the tax, theorized that Virginia Beach attracts "rhinestone cowboys" who enjoy big vehicles they may not need.
The average dip in assessments for all vehicles was 16 percent, said Eric Schmudde, deputy commissioner of revenue.
The personal property tax rate in Virginia Beach is $3.70 per $100 of assessed value, minus a 57.5 percent discount on the first $20,000.
He said if people do manage to unload their depreciating SUVs, they're buying less expensive cars.
"We used to have this constant replacement of SUVs. Now people are buying down."
Aaron Applegate, (757) 222-5122, aaron.applegate@pilotonline.com
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It would be nice and fitting
It would be nice and fitting if the voters decided Mr. Kellam didn't "need" his job anymore. I for one do not believe he does.
Lets really look at taxes and spending
I spent a bit of time looking at the VB budgets. According to the executive summary for FY 03-04 the total operating and capital budget was 1,493,437,287 and the population est was 434,250. This amounts to 3,439 per citizen
Fast forward to the FY 08-09 executive summary. The same categories totaled 1,981,017,313 and the report population was 433,033. This amounts to 4,575 per citizen
So in the last 5 years we have increased the cost of city government by almost 33%. Or almost 488 million dollars. At 3% annual inflation this is double the inflation rate!
So let me ask you. Have you received pay increases of 6.6% each of the the last 5 years? No?
So all the whining about tight budgets is 100% BS. Fact is the city has ridden the real estate bubble on our backs. And now that it has popped they need to deal with it just like we the citizens are. Tightening our budgets, holding off on big ticket spending and making sacrifices.
Can they do it? Doubtful.
Missing the Point
I think most people are missing the point. First, why is there ANY personal property tax on your car. Why should a person that drives an expensive vehicle pay more tax than one that drives a cheap car? Does it cost the city more when you drive a Mercedes rather than a Yugo? After all, you already paid more sales tax when you bought it, and gas tax every time you fill up, and license fees, etc. It is just another way to get in your pocket.
Second, the city is whining about losing tax money. Remember a few years ago when they had so much money from the real estate increases that they did not know what to do with it! Where is that money? It has gone to unnecessary spending that they now do not want to reduce back to the pre-boom levels. Give me a break! Do what we do, and what any real business does, live within the amounts you have.
IRT: Auto Allowances
Currently on the books there are 31 authorized vehicle allowances, typical paid to the Virginia Beach City Department Heads and above.
According to a record of the City Council during a recent budget meeting, this is a form of compensation offered to executives such as, City Council Appointees and Department Heads, I would imagine to attact and retain educated and civic minded leaderership into these rolls.
The total budget for these 31 authorized vehicles is:
$194,000
Thats just over $6,258 per annum, or about 521.50 per month per person as quoted below by 2Cents. Surely, this can be reviewed and modified.
Please see question number 4 in the hot topics on VBGOV.com FY 2009 / 2010. Again asked for by the Honorable Mr. Bill DeStaff.
re: last post
Uhmmmm folks....that is $500 a month - again for an undisclosed number of months, or years. Are you calling your city council and ringing the phones off the hook? Have you marked the next city council meeting on your calendar? For more reason to be aggravated see yesterday's artical and comments on
Latest idea in Beach: Chuck the suggestion box
VIRGINIA BEACH City employees with money-saving ideas better act fast: Their suggestion box might get the ax. Officials say it hasn't been worth the effort. Started in mid-2007, "My Idea Work$ " was designed to solicit cost-cutting ideas from the city's 7,100 employees. If one is used, the person who submitted it gets 5 percent of the savings, or $2,500, whichever is less.
23 comments Read more
Kirk Smith and RussB are so right
SOME OTHER FACTS
Submitted by Kirk.Smith on Wed, 03/04/2009 at 2:30 pm.
RussB
Good point, currently there are (fact) 265 "take home" vechicles assigned to various departments in Virginia Beach.
Assuming the "average" vehicle is bought in a range of 10K to 40K, the median is 25K.
265 times $25,000 is equal to $6,625,000.
Again an area that needs a much harder look.
BZ to you.
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Not only are there these vehicles, there are also an undisclosed number of department heads or directors that receive a $500 car allowance. This is primarily a “fringe benefit” perk. This situation really needs to be addressed. If these privately owned vehicles are not used to attend to city business at least 70% of the time there should be no car allowance. If these employees do not require the use of a car, in the commission of performing their job on a regular and sustained basis, they should be filling out expense forms for gas and mileage. They should not have their personal car bought and paid for by the citizens of Virginia Beach.
A true leader
IRT LinWoodK
Honorable Mr. Bill R. DeStaff, City Council - At Large.
Although I do not know this person in any context and was ashamed that I did not know squat during the last election about my own cities nominees, I am going to point you all in his direction.
"DeSteph is a U.S. Navy veteran. As a result of his leadership as Senior Vice President of AMTI, they now have six satellite offices in the United States and employees at 23 additional client-site locations with headquarters in the City of Virginia Beach. His forward-thinking approach has resulted in his company being the ninth fastest growing small business in Virginia. Bill and his wife Donna have two children, Michael and Jennifer."
Please refer to his questions located on VBGOV.COM in the "Hot Topics" area of FY 2009-2010 Budget Question and Answer.
Some other facts
RussB
Good point, currently there are (fact) 265 "take home" vechicles assigned to various departments in Virginia Beach.
Assuming the "average" vehicle is bought in a range of 10K to 40K, the median is 25K.
265 times $25,000 is equal to $6,625,000.
Again an area that needs a much harder look.
BZ to you.
Just to clarify
- Maybe someone said this already but I am not reading through 80 comments.... even IF a military member registered their vehicle in VA (like we have, since we bought a house here...), they are still exempt from paying the property tax on them. Maybe the registration fees will help VA, but they won't get any additional tax payments from the active duty military.
But, you'll get our money since we are retired now! Just another tax on top of the other several thousand a year we pay.
You want a suggestion...
I have a suggestion for anyone displeased with local southeastern VA governments and their antics. Do as I did several years ago... move to northeastern NC. The personal property tax rates on vehicles and real estate are a fraction of those in VA. And, you quickly get used to the commute.
However, if you are going to bring that typical southeastern VA attitude with you... stay where you are, we don’t want or need you.