car tax increase

Brent Finnegan -- October 3rd, 2006

…or maybe it’s a decrease in the decrease, depending on how you look at it.

Remember when Jim Gilmore swore that if elected governor, he would eliminate the car tax in Virginia? That was almost 10 years ago. In recent years, the “phaseout” has been at a stand-still, with the state paying 70 percent of our car tax while we pay the other 30 (if I’m not mistaken, it’s been this way ever since Gilmore left office).

Now, because of a state spending cap, the state will only be paying 42 percent of our car tax, and we’ll pay 58. But the state cap is only one reason you’ll be paying more this year. The other comes from the city. The H’burg personal property tax has increased this year as well. From a city council meeting earlier this year:

City Manager Baker said that the City’s total projected fiscal year 2007 revenue from all property taxes, including the state reimbursement for personal property tax relief, is $24,713,613. The proposed appropriation and school debt service is $26,685,818. In addition another $340,000 is proposed in the Public Transportation budget for the purchase of three new school buses. All of the property taxes are not enough to fund the schools.

And so the city council voted to increase the personal property tax.

June Hosaflook, Harrisonburg’s commissioner of revenue explains in Saturday’s DNR what all of this means for the taxpayer. She says that the reduction in state relief has to do with the spending cap and the growing number of cars in the state. But oddly, there was no mention in the article that the state legislature is currently mired in a “transportation budget crisis.”

I’m not an economist, but it would seem that the Gilmore initiative and the transportation funding issue are related in some way. You know: cars drive on roads, roads cost money to build and fix. Just a guess… I don’t know if Harrisonburg’s senator, Mark Obenshain, voted for or against the against the cap–I can’t find anything online about it. But on the issue of transportation money, Obenshain remains staunchly anti-tax, and joins fellow Republicans in placing the blame squarely on VDOT spending habits.

Anyway, regardless of what your political views are, you’ll be paying significantly more on your car tax this year (58 percent of $3 per every $100 of your car’s assessed worth)… Unless of course you drive a clunker, in which case you pay nothing. Guess I should have kept my old Tercel.

-finnegan

5 Responses to “car tax increase”

  1. Adam Sharp says:

    Obenshain didn’t get to Richmond until January 2004. I think the cap was put in place before that (2000?), and since it’s a fixed dollar amount, the percentage the state pays decreases each year as more cars enter the system. So Obenshain probably didn’t vote on that.

    But he might support getting rid of the tax completely, though I don’t know if he supports the state paying the localities, or just sticking the bill on the localities. That might depend on whether it’s an election year or not.

  2. finnegan says:

    That’s probably why I can’t find anything about it on his record.

    the percentage the state pays decreases each year as more cars enter the system.

    Is that indefinite? It’s my understanding that it’s been holding at 70 percent until just recently.

    I also undertand the tax break benifits areas like NoVa, not so much the more rural areas, like in the Valley.

  3. afp-chris graham says:

    Brent,

    The cap on the car-tax-relief reimbursement actually dates to 2004, not 2000.
    Here’s a link to a story in the May 5, 2004, AFP on the discussion of the cap – http://www.augustafreepress.com/stories/storyReader$21511.

  4. finnegan says:

    Thanks for the link, Chris.

    When I talked to the city’s commissioner of revenue, she made it sound like this was all new. Maybe is is for H’burg, since the personal prop tax went up (I think by 30 percent) this year.

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