Land-use assessment programs are a local option under the Code of Virginia. Moreover, this bill conflicts with Article IV, Section 14 of the Constitution of Virginia, which says, “The General Assembly shall not enact any local, special or private law for the assessment or collection of taxes, except as to animals which the General Assembly may deem dangerous to the farming interests.”
The infringement of H.B. 1204 on local authority would set a dangerous precedent when it comes to local control over land-use issues.The bill would compromise the most significant revenue stream available to local governments: real estate taxes.
For these and many other reasons, the governor should veto H.B. 1204.
H.B. 1204 outlines conditions in counties where the population grew at least 14 percent between the 2010 Census and July 1, 2016, according to estimates from the University of Virginia, and requires a commissioner of revenue or assessing official to assess qualifying real estate of more than 20 acres as open space at the request of the property owner. The desire of the property owner would be the only determining factor of the land’s value.
Under those conditions, the only affected localities would be Arlington and Loudoun counties and the people who live there. The only beneficiaries of this special tax treatment would be two private and exclusive country clubs in Arlington County. The clubs have hefty initiation fees, at or near $100,000.
In Arlington County alone, the bill would eliminate $1.43 million in local tax revenue annually that would otherwise be used for essential public services. For example, such a reduction is the equivalent of the current per-pupil funding for 75 students, a full year of operational costs for the Comprehensive Homeless Services Shelter or the current cost for 700 lane-miles of asphalt street maintenance in the county.
The country clubs in Arlington County may have a legitimate issue regarding the way the county applies the real estate assessment formula, but this is an issue that must be negotiated at the county level, without interference from the state. In fact, a court case is pending regarding the 2014 assessment. Therefore, the prudent path would be for the governor to veto H.B. 1204 and permit the court to rule on the fairness issues raised by the clubs.
If the country clubs are really interested in preserving open space, Virginia has a successful land preservation tax-credit program. It gives financial incentives to landowners who agree to keep their open space undeveloped, in perpetuity, while ensuring that the space is maintained for everyone’s benefit. The preservation tax-credit program operates across the commonwealth and enjoys broad support.
By contrast, H.B. 1204 extends a tax break to landowners whose property simply meets minimum acreage requirements in two localities. There is little actual incentive for recipients to follow sound environmental practices or to forgo future development opportunities.
I know that the country clubs are good neighbors. They are valued parts of the Arlington fabric. I believe the County Board recognizes that, too. In fact, meetings are underway between the county and the country clubs to establish a mutually acceptable pathway for resolving the real estate assessment issue. This effort deserves a chance to work.