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tax relief

DELIVERING ON OUR COMMITMENT

CONTEXT -- READ BEFORE JUMPING IN

(As of Feb. 6, 2023) In the early parts of this new Republican majority on City Council, much has been said on this topic. This page was produced to help inform citizens, diffuse any tensions, offer facts, encourage productive dialogue, and chart a course for moving forward. 

At the outset, know this page is written in long form, and I know some will look right past all of this content to immediately use it to cause division and intentionally spark political chaos. I will not contribute to that negative commentary, rather, point folks here to read so they can come to their own conclusions. I care more about offering solutions, not throwing mud. 


There are sub-headings to help guide the reader through this page as a way to help them find what they are looking for.

WATCH: Council Adopting Faraldi's Motion to Deliver Solutions For Tax Relief

WHAT GOT US HERE?

It is my hope the reader works through this completely, thus walking away informed. By the end of this read, you may agree or disagree with my perspective(s), both of which are not what I am aiming for; rather, I am only attempting to speak truth to what has happened thus far, and where Council is headed. 

Know this -- regardless of which option Council may select, or how tax relief may come, by one strategy or another, it is indeed coming.  

Let's jump in!

In 2020, Lynchburg City Council adopted a Property Tax Rate resulting in a $4,800,000 tax increase on property owners in the city. I voted against this increase. Now, over the last two years, we see the city had close to $100,000,000 in leftover funds, with $14,000,000 of that sum categorized as "Additional Revenue." In other words, the city has had a massive surplus for two years in a row, and of that surplus, a significant portion of those dollars was associated with taxes that exceeded projections. Clearly, this tax increase on your property was not needed and should be returned to you.

WHAT ARE OUR OPTIONS?

​In November of 2022, voters elected three Republicans to City Council. For the first time in over twenty years, Lynchburg has a Republican Majority on City Council, and we're set on delivering results that positively impact your bank account. These three, in addition to the two Republicans Currently on City Council, all agree that your tax burden in the city should be significantly reduced. But how should that happen? Currently, there are two strategies being debated; either, A) a retroactive adjustment to the current fiscal year or B) a disciplined approach incorporated into the upcoming budget discussions for Fiscal Year 2024.

WHAT ARE THE PROS AND CONS?

For "Option A," while it would seemingly be "immediate" action on returning the dollars back to taxpayers, the process associated would be laborious, slow, and inefficient. Laborious because it would require an associated public hearing (according to state code), and the re-opening of an old budget all while council and City Hall would begin working through a new one. Slow, because the public hearings must have ample lead time, and Council must vote twice on financial matters (which in actuality takes a minimum of a month). In fact, your account would not realize this until early spring, if not later. This is because Council must consider fiscal policies at two separate meetings (a 30 day plus process) and have an associated public hearing. At the very same time, Council would be working through the upcoming budget and making policy decisions on that front. Here's another thought, and that is to say it would be wrong of Council to move foward with this relief without knowing the implications, first. Truly, this action would take a long time to fully implement.   Inefficient, because proponents of this approach cannot articulate how the funds would be returned to property owners. The only "solution" is to have checks mailed out, which has its own financial costs (postage, for one) and audit concerns associated (meaning, how can we ensure Mr. Smith is receiving his proper funds, not Mr. Jones'; bounced checks; and working through residents who have moved out of or around the city). Worse, it only lowers your two of four payments, rather than long-term relief. This option is also inefficient because it chips away at the broader conversation of "bold tax relief" as opposed to approaching this topic with one big swing aimed at the fences.  Finally, per my motion on January 24th, Council has already directed City Hall on this topic. As such, adding Option A to an upcoming agenda would not be proper. "Option B" offers that "one big swing aimed at the fences," is a cleaner approach, but is incorporated in the upcoming budget process. Being vested in the budget, this strategy can give off the perception that all of or a portion of the five Republicans are hesitant to return these dollars, which I know is not the case. This option also means that council has the full picture of the situation and can make the most informed decisions, as opposed to a quick action that may not produce positive returns. In weighing both options, I do submit that "Option B" makes a great deal more sense -- let's knock this out of the park!

WHAT HAS BEEN VOTED ON?

Now there are some questions about what has been considered, and how folks voted. Let's clear that up. I’m pleased a majority of Republicans directed City Hall to formulate legal, creative, and effective solutions for property tax relief in Lynchburg. Through my motion at the Finance Committee and a 5-2 vote at our full meeting, Council has laid the foundation for sending millions of tax dollars directly back to citizens. This is "Option B" from above. It is worth noting my motion was a historic one -- in my study of history, I cannot find a motion to publicly direct City Hall to produce something. It has only been done by individual requests of council members. That means, knowing the direction was firm, three Republicans and two Independents/Democrats sided with my motion because it is the right way to engage this issue.  Now, there are many claims out there saying we "voted against immediate tax relief." This is misleading. There have been three failed motions to either slate this topic for discussion ("immediate" property tax relief or "Option A") or to change my motion at hand (above/what was adopted). The failed motions were to:  Position a Property Tax Rate discussion for February 28th. Position a Property Tax Rate discussion for January 24th.  Change my motion for directing City Hall to produce solutions.  Regardless of what some may say, I, and others, have not "voted against immediate tax relief." Rather, only procedural motions to place it on the table or amend a proposal at hand. In other words, it is not factually accurate to say I, or others, voted against lowering the property tax rate. This is nothing more than a manipulation of parliamentary operations to claim one voted against their wishes. In actuality, there has not been an up or down vote on "Option A."  For many reasons, I truly believe my recommendation, or "Option B," is the right way to go.

WHAT IS THE PLAN?

With Council looking towards the upcoming budget to accomplish this level of relief, the sky is the limit. Here is how we "aim for the fences" in my opinion:

Equalization of the Property Tax Rate...and then some.

Once assessments come in, Council should have a fairly good understanding of the Equalized Property Tax Rate would be (or the rate by which your bill would not increase). Whatever that number may be, we should take another two cents off the rate at a minimum. For example (and this is just an example, we'll know specifics in the future) if the new equalized rate was $0.86 per $100 of assessed value, we should move forward with $0.84. Doing this would ensure your taxes do not go up, return the $4,800,000 from above, and force City Hall to operate with a reduced budget for the long haul, as opposed to just here and now. Once we know the assessments, we will know the equalized rates and can speak more intelligently about the specific rate needed to accomplish this proposal. 

February 10, 2023 Update: During our budget retreat, council was informed the Equalized Property Tax Rate is likely to be in the $0.92 per $100 of assessed value range  

Further reduction in the Personal Property Tax Ratio (Car Tax).

Currently, the city is operating with a 75% ratio on this tax. Meaning, if your tax was $100, the government only takes $75. We should reduce this to at least 50%. This does two things: it further reduces your taxes overall but also helps those who may not own their home and pay property taxes, which is a large portion of the population. For me, this might even be able to be closer to 40%, and should be a major component of the overall strategy. 

Meals Tax reduction, remove from fast food restaurants. 

It's fairly straightforward -- if the cost of a hamburger have gone up with inflation and the meals/sales tax rate stay the same, the consumer is going to pay more in taxes. With this in mind, Council should lower the meals tax rate by a couple of points, if not more. Further, we should adopt Former Councilman Nelson's proposal of complete removal from fast food restaurants to help those who are on the go, potentially moving from job to job, as well as folks who may not have many other options for food. 

 

Removal of $10 Trash Fee on Utility Bills. 

This is a no-brainer for me. If we have so much additional revenue in the city, we should not be charged additional fees for this type of service. Removing the $10 Trash Fee will help everyone using the service. Albeit a small reduction, every little bit helps. 

CONCLUSION

If we adopted all, parts of, or policies inspired by these proposals, we would be developing a robust tax relief package. Do the math for yourself; add all of the various aspects offered above together and it should be quite significant. I realize someone may have a better proposal, and I hope they do! But, I also know these areas impact the overwhelming majority of taxpayers and will greatly help lower the fiscal stress our government imposes. 

Other areas to consider would be related to our business community and the variety of fees within those areas. But, for the individual, I would contend these proposals, if adopted, would go a very long way. 

Of course, let me know what you think! I hope you've read through the bulk of what is offered here. If you have questions, please ask. If you disagree, please share why. If you align with these proposals, I'd love to hear why on that, too. 

Finally, know I am committed to uniting our Council behind significant and bold tax relief. In this moment, it's not Council's job to have a bunch of opinions or policies rush through, rather, to develop informed opinions we can act on. We may have different opinions on how to get there, but I will do my level best to offer solutions that benefit you first and foremost. 

I'll be updating this page as the narrative unfolds. But for now, that's all I have!

Sincerely,

Chris Faraldi, M.A.

Ward IV Representative, Vice Mayor

Lynchburg City Council

(As of February 6th)

Faraldi Signature (2).png
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