Manassas Tax Collections Rise Despite Malaise

Officials Expect Slim Gain To Give Way to Declines

Although businesses closed, property values declined and gas prices skyrocketed last year, the money collected at the Manassas revenue commissioner's office was up from previous years, city officials said last week.

But not by much.

In fiscal 2008, the office collected nearly $75.3 million from various taxes and assessments in the city, Manassas Commissioner of the Revenue John P. Grzejka said. That number is up 2 percent from fiscal 2007, when his department collected $73.7 million, which was a 5 percent increase from fiscal 2006.

"We did generate more revenue than the previous year, which is a positive, but only by a slim margin," Grzejka said. Fiscal 2008, which ended June 30, "is when we started to see the downturn, and it is going to be carried over to this year and the next. I think the trend is going to be that we will see less revenue coming into the city annually."

On Monday, Grzejka gave the Manassas City Council a glimpse of his department's fiscal 2008 report, which showed gains largely in commercial real estate taxes offsetting declines in several other areas. The report contains only revenue data that go through his office and does not include revenue sources such as parking tickets and decals, museum store sales and court fines, he said.

According to the report, the revenue generated by personal property tax on vehicles and watercraft declined almost 16 percent from 2007 to 2008, resulting in a loss of almost $363,000.

Revenue from the lodging, food, beverage and cigarette taxes declined 30 percent, resulting in a loss of almost $160,000, the report says.

Last fiscal year, 627 businesses in the city closed, but only 395 new ones opened, according to the report. That reduced the number of businesses in the city from 3,310 in 2007 to 3,078 last year. With the decline, revenue from the city's business license tax fell 9 percent last fiscal year, to about $3 million.

Despite the decline in businesses, business personal property tax revenue inched up because assessments on business equipment rose, Grzejka said, adding that a "number of factors" go into determining assessment values. "That's why revenue shows a slight increase."

The city collected about $6.6 million from the business personal property tax last fiscal year, the report says, up about 3.4 percent.

Besides business and personal property taxes, Grzejka said, his office also oversees the city's real estate taxes. It is there, he said, that Manassas generated its money last year.

The increase in the real estate tax rate last year is what helped bring in the extra revenue, particularly from businesses, Grzejka said. The City Council raised the tax rate almost 20 percent last year, from 85.5 cents per $100 of assessed value to $1.015 per $100 of assessed value. That does not include a 10-cent fire levy the council also passed.

"Businesses were hit hard last year," Grzejka said. "But they are what helped give us that boost."

Residential property assessments dropped almost 19 percent from 2007 to 2008, but business assessments went up about 5 percent, the report says. Foreclosures plagued the city, with 922 last year vs. 313 in 2007.

Despite the sharp declines in parts of the real estate market, the city collected about $48.4 million from the real estate tax in fiscal 2008, up 5 percent from fiscal 2007.

Grzejka said property assessments are expected to drop almost 30 percent this year in the residential sector but only half that amount or less on the commercial side.

Council members have asked city officials to balance the fiscal 2010 budget without raising residential property tax bills.

To view the commissioner's full annual report, visit his department's Web page at http://www.manassascity.org/index.asp?NID=107.