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jor land uses conducted by PEC economist Tamara Vance shows that for every dollar collected in taxes from Rappahannock’s farms, forests and open spaces, 17 cents is spent on services supplied to those same land use categories. Or, from another perspective, only 17 percent of the taxes paid by the farmer or woodlot owner goes to provide services that the farmer or woodlot owner needs.
The same lopsided ratio applies to industrial and commercial property, For every dollar collected in taxes on business property, 23 cents is spent on services to those businesses.
Where do taxes paid by farmers and business operators go? The remainder-83 percent in the farmer’s case, 47 percent in the business person’s - goes to subsidize residential development, according to PEC’s study.
“This ought to hush up a lot of people who are saying that the small lot owner is carrying the tax burden,” said beef cattleman Mike Massie. “I wonder what the difference was before. I thought that with land use the difference would even out.”
Development Doesn’t Pay
The study challenges the popular belief that residential growth expands the tax base and thereby contributes to the county’s economic health. Residential development does bring improvements that raise both the assessed value of real estate and the county’s revenue from real estate taxes, but residential development simultaneously increases demand for public services, particularly schools, police, fire and rescue, and solid waste disposal. PEC’s study shows that the cost of providing those services outstrips the additional tax revenue brought in by residential development.
In Rappahannock’s case, $1.20 is spent on providing county services for every dollar collected in taxes from residential land.
The imbalance is clearer when viewed in terms of total intake and output:
- Residential land generates $2,700,000 in revenue and requires services which cost the county $3,300,000. (MINUS $552,000)
-Farms, forests and open space generate $591,000 in revenue and require expenditures of $100,000. The revenue figure includes the deferral for use-value taxation. (PLUS $491,000)
92.8%