Report: Norfolk Tea Party II Rally

I was still a bit on the fence this morning about whether to attend the Norfolk Tea Party II rally until I saw this morning’s paper and the article about it. (Note: while taxes in Norfolk are high, the article contains a significant inaccuracy. One person claimed that his taxes were $1,000 per month on a house assessed for $379,000. At $1.27 per $100, the annual tax is $4,813.30, or about $1,200 per quarter.)

Upon arrival, I noticed some people wearing bright green T-shirts. I was informed that these were the members of the organizing committee. Looking around, I saw some of the usual suspects wearing or holding the shirts, people who have been strong supporters of Councilman Randy Wright. Sitting on a corner bar stool as I walked in was Wright himself. Rather than beat around the bush, I asked him what his involvement in this incarnation of the Norfolk Tea Party was. He said he was helping. I then asked him if this was the beginnings of his campaign for mayor in 2010, as I had heard it was. He bristled at the suggestion and told me that it was not.

I talked to a couple of green T-shirt clad women sitting at a table, who I did not know nor had I previously seen as Wright supporters. These women were from the Estabrook neighborhood – my old neighborhood – and had gotten involved because they wanted to see a reduction in the real estate tax rate. They were particularly concerned about the effect of the increasing taxes on seniors who live on fixed incomes. I asked them if they were aware of the tax relief for seniors and disabled and they were vaguely familiar, although they did not know that the qualification limits were set by the General Assembly.

I then spotted another green T-shirter who I knew was highly unlikely to be a Wright supporter: former Wright opponent for council Ernie Sams. Sams told me that the city of Norfolk had gotten a $40 million windfall this year as the result of the real estate value increase and the increase in the personal property taxes. When I mentioned that the personal property tax reimbursement reduction was the result of General Assembly action, he appeared to blame this on the fact that Norfolk didn’t get its fair share (because of older vehicles) and that the city should have picked up the difference.

(Perhaps I misunderstood his $40 million reference because there is no way that Norfolk has gotten that kind of windfall in a single year. Looking at the budget for FY07, budgeted real estate tax revenues for this year are approximately $35.5 million higher than they were two years ago; personal property tax revenues are $1.4 million higher for the same time frame.)

Shortly thereafter, the rally started. I would estimate that there were about 300 or so people there. The overall plan is to get council to reduce the real estate tax rate to $1.08 in FY 2008, which starts 7/1/07. The chairman of the group, Brian Smith, plans to accomplish this by collecting 20,000 signatures on a petition that will be presented to council. They are going to work the polls this November to gather signatures. They urged people to volunteer, contribute and to attend the scheduled town hall meetings.

One of the speakers at the rally was CFP Larry Gregory. Gregory spoke about the unresponsiveness of city manager, Regina Williams. Williams was asked to present two budgets last cycle, including one showing a 20-cent reduction in the real estate tax rate. Williams did not present that budget. Also included in Gregory’s remarks was the cost of a new courthouse, which at the time was supposed to cost $84 million, was reported last week to cost $100 million, and which may cost $120 million by the time it is built. Gregory questioned the need to spend money on a new courthouse at all.

Gregory emphasized that the rate reduction would not result in a reduction in revenues to the city, so the question of what would we be willing to give up was moot. He said that this is merely a reduction in the rate of increase, due to the increasing property values. Norfolk, like other cities, has experienced significant increases in real estate values over the last few years: 20% and 25.8% in the last two fiscal years alone.

Afterwards, I spoke with several of the attendees. A couple weren’t ready to sign on with this program, arguing that a reduction in 2008 was putting a bandaid on the bigger problem of having a council that doesn’t listen to the citizens, a familiar refrain. One talked about the possibility of a homestead exemption or a different rate for homeowners. I took the opportunity to talk about the Dillon Rule and how it handicaps the localities. I also mentioned Delegate Kenny Alexander’s bill to reduce the rate on homeowners, which has been deferred until 2007.

My own sense is that while Norfolk homeowners deserve meaningful real estate tax relief, a 19-cent reduction is unrealistic. The bottom line is that such relief requires the ability to count to five – as in five council members who support the idea – and I just don’t see that happening. And we know how successul petitions are at convincing council to bend to the will of the people – NOT!

On a practical level, I fully recognize that real estate tax rates are a major tool in the toolbox of council under the horribly outdated Dillon Rule. I see nothing that makes me think the General Assembly is willing to loosen its grip on controlling the localities. As the result, a significant reduction in the rate is likely to handicap the city for years to come. With increases in real estate values starting to slow, – and, in some areas of the city, actually decrease – the commitments already made for the courthouse, light rail and other projects, a reduction in 2008 may be very quickly followed by an increase, just to cover the bills.

That being said, I wish the Norfolk Tea Party II the very best. They announced that there will be another meeting next month. And an event is being planned for December 16, the 233rd anniversary of the Boston Tea Party.