State amendment proposals
Two of the three referenda on the statewide ballot Tuesday are on proposed amendments to Virginia’s Constitution that could expand property tax exemptions for injured veterans, disabled persons and homeowners above the age of 65. Rockbridge County revenue commissioner David Whitesell said the proposed changes would have little effect on the county.
For two years now, the county has provided similar tax relief to the maximum extent permitted by the Commonwealth. “[The tax structure] is currently set at the lowest value that the state allows,” Whitesell said.
One of the amendments would shift the eligibility of senior citizens for property tax exemptions. Instead of the eligibility being defined vaguely as those who bear “an extraordinary tax burden,” it would be set at any value of wealth or income that a local jurisdiction wishes to determine.
In Rockbridge County, that would be what it is now. “[The tax structure] is currently set at the lowest value that the state allows,” Whitesell said. “If they allow the local government bodies to set their own values, that’s not going to change any.”
When Rockbridge County most recently lowered the financial worth limitations for the tax benefits, Whitesell said, it saw only a moderate increase in tax relief applications. Today, he estimated, there are roughly 200 people who apply for the relief in the county.
Local disability advocates have shown little interest in the tax changes. David Woody, director of the Lexington Disabilities Services Board, said Monday that he was not familiar with the proposed amendments.
The third referendum item on the ballot Tuesday concerns the state's budget cushion. Each year, the Commonwealth of Virginia can stow away up to 10 percent of its annual tax revenue in a “revenue stabilization fund.” The amount allowed for this is calculated on an average of income and sales taxes from the preceding three fiscal years Since the Commonwealth must pass and operate on a balance budget each year, this “rainy day fund” serves to fill in when there is a shortfall in revenue . For example, the account prevented around $350 million in cuts to programs statewide in 2009.
On Tuesday, voters will decide whether Virginia should allow this fund to grow to as much as 15 percent of the average tax figure. State Secretary of Finance Ric Brown views this fiscally conservative plan as sound in the long term. He said it will not change how much funding localities receive from Richmond in the short term.
But some are concerned that increasing the potential size of the fund could leave Richmond with less money to appropriate to localities, hurting their economies in the process.
Brown said the fund does not draw resources from other parts of the budget, and when revenues are low in bad economic times, the rainy day fund does not grow.
That is expected to be the picture for a few years. “The deposits will pick up in [fiscal years] 2013 and 2014, but it’s going to be down the road before we hit 10 percent, let alone 15 percent,” he said. The fund currently sits at 8 percent.
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