More than 150 residents, builders and business owners packed a Spotsylvania County Board of Supervisors meeting last night urging supervisors not to repeal a five-year real-estate tax on energy-efficient buildings.
Some people threatened to sue if the county did not grandfather in current applications and those homes already approved. Despite the pleas, supervisors decided against providing the 100 percent tax break.
The chief reason supervisors brought this to a public hearing is because of the loss in real-estate tax revenue. The exemption cost the county $61,000 in real-estate tax revenue in fiscal year 2010 that ended in July. But the loss may be more than $1 million for this fiscal year if the ordinance isn't changed, said Commissioner of Revenue Debbie Williams.
Spotsylvania Regional Medical Center inquired about the tax benefit, which means the county could have been out $600,000 in real-estate taxes each year if the hospital qualified.
Suzanne Wilson said her family sold their Smoketree subdivision home in February and planned to move closer to her work in Stafford County. When a friend told her about the real-estate tax credit for energy-efficient homes in Spotsylvania, the family reconsidered. "It sold us. If it weren't for this incentive, we indeed would most likely be Stafford County residents," she said.
Linda Davidson, of Old Mill Lane, said Williams sent her a letter stating her application was in jeopardy if the ordinance was changed or repealed. Several other residents said they got letters from Williams stating their already-approved home or business is now in jeopardy to get the tax break.
Supervisor Gary Skinner said county staff had nothing to do with sending the letters and that Williams is an elected official. The accusations, and Skinner's comments, led Williams to explain why she sent the letter, briefly arguing with Skinner. "I felt I was obligated to contact those people with a second letter that there was the possibility this ordinance would be repealed. I thought I was doing the right thing," she said.
Kaeser Compressors President Frank Mueller said he expanded the business with an energy-efficient certification in Spotsy because of the benefit. "Changing the rules in the middle of the game sends a wrong message."
Glen Raymond, president of Fredericksburg Area Builders Association and Goglia Homes, provided supervisors with a cost-analysis report that showed local jobs have been created and hundreds of thousands in local tax revenue will be created from these homes that did not exist before this ordinance passed. Some criticized supervisors for not having any analysis to show this tax break would adversely impact county coffers. "Housing is the driving force behind our economic recovery," Raymond said.
Supervisors approved this ordinance in 2007, but only recently have builders, businesses and residents taken advantage. Eighteen buildings received the exemption for fiscal year 2010. So far this fiscal year, 28 buildings have been approved. The five-year break was unlike any other energy-efficient credit in the state, and the county set the bar in this type of development.
Four people asked supervisors to repeal or change the tax break.
Steve Thomas, chairman of the county Republican Committee, said supervisors need to provide a real-estate tax break for all. The ordinance is "really narrowly focused" and could result is raising real-estate taxes to cover the losses. "That's a problem. It is creating a situation like an upside Robin Hood, stealing from the poor to pay the rich."
Still, speaker after speaker pleaded with supervisors to not repeal the ordinance. Some said county officials are being short-sighted. Some said they would be fine with an amendment to allow a full rebate in the first few years and then slowly lower the benefit.
Supervisors decided on a 5-1 vote to amend the ordinance as follows: Qualified homes and business owners would pay a special real estate rate of 53 cents per $100 of assessed value worth up to $300,000 and the regular tax rate of 86 cents for the value more than $300,000 in 2011, 2012 and 2013.
"The ordinance as it is written, a 100 percent tax deletion for five years is very, let's say, generous," said Supervisor Benjamin Pitts.
Supervisor Jerry Logan directed staff to seek an opinion from Attorney General Ken Cuccinelli on whether the county can grandfather applications being evaluated or already approved. County Attorney Jacob Stroman said state law does not allow local governments to grandfather anyone. "We need to do everything that is possible to grandfather everyone that has qualified," Logan said.
Dan Telvock: 540/374-5438
Email: dtelvock@freelancestar.com
Supervisors decided on a 5-1 vote to amend the ordinance that allows a five-year 100 percent real-estate tax break for energy-efficient buildings.
Qualified homes and businesses now will pay a special real-estate tax rate of 53 cents per $100 of assessed value worth up to $300,000. The regular tax rate of 86 cents would come into effect for the value above $300,000. This tax break would be in effect for 2011, 2012 and 2013, instead of five years.
Supervisor Gary Jackson voted against the change and Supervisor T.C. Waddy was absent.