March 7, 2006
Charlottesville’s new budget includes a two cent property tax cut. On paper it may look like relief but home owners say in reality they're facing a hefty tax increase.
In the 2007 budget proposal, homeowners' taxes will account for more than 50% of the city's revenue, and now some homeowners are saying it is time that the city look for money elsewhere.
"Where is all the money going?" asked homeowner Diane Auger Smith.
Even with the property tax cut the city is proposing, Smith will still pay 13 percent more in taxes this coming year.
“That results in $6,272 per year or $523 per month which I think is really becoming very difficult to afford,” said Auger Smith.
Diane is forced to cut her budget while the city plans to increase its spending, up eight percent from last year.
“In the past ten years the city budget has almost doubled...and I have to say that in the ten years that I've lived here my services have not doubled,” said Auger Smith
Her services may not have doubled, but the value of her home has.
“They don't want their houses to depreciate in value--they want them to keep appreciating. Now the downside of that is that we are dependent on the real estate tax to raise revenue for the city,” said Charlottesville City Councilor Kevin Lynch.
Diane says her house is worth $608,000 on paper, money she'd see only if she sold her home.
“I think its becoming less and less attractive to live here,” said Auger Smith
In fact, for three months a “for-sale” sign was up outside Diane’s house but with no buyers she's forced to bite the bullet and pay the taxes. City councilors say they feel for home owners and are looking for ways to help them out.
“This year we're going to try to target the assessment relief,” said Lynch.
Lynch said he would even like the property tax to be cut by another two cents, but it is hard to make those cuts when people want to pay less but they don't want to get less.
The budget is not final and will be adopted on April 11, 2006.
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