Proposed W.Va. tax revenue bill worries officials

March 01, 1998|By CLYDE FORD

Proposed W.Va. tax revenue bill worries officials

CHARLES TOWN, W.Va. - Officials in Jefferson and Berkeley counties fear that if a West Virginia Senate bill were to become law, it would change the way property planned for development is appraised.

Jefferson County officials estimated the proposed changes in property appraisals could cost the county as much as $500,000 a year in tax revenue. The entire county budget is about $6 million.

The proposed bill would lower the tax level for planned subdivisions that are currently considered commercial projects, said Del. John Doyle, D-Jefferson.


The measure calls for the properties subdivided for development to be taxed as if they were still farm land until homes on them are sold, he said.

The bill would hurt the Jefferson County school system even more, since the schools get about 80 percent of all the revenue collected from property taxes, officials said.

"We're strongly opposed to this bill," said Tom Lange, a Jefferson County educator and vice president of the West Virginia Education Association. "This bill would hurt education."

"That bill's a killer," said Jefferson County Commissioner Dean Hockensmith. "You take a chunk of revenue like that out of there, it'll kill us."

Doyle said he plans to fight the bill now that it is in the House of Delegates.

"That would cost our schools and counties a lot of money," Doyle said. "Unless we're able to stop this bill from passing, I'd regard it as a disaster for Jefferson County."

Jefferson County Commissioner James K. Ruland said Senate Bill 241 would help developers at the cost of county residents.

Currently, when a farm is purchased by a developer, the property is subdivided and the new lots recorded, according to county officials.

The new lots are given an assessed value and taxed at Class 3, because a development is a commercial enterprise, county officials said. The Class 3 tax rate per $100 of assessed value is $2.4312, said Jefferson County Assessor Ginger Bordier.

The new lots are taxed at Class 3 until the homes are purchased. The following year they are taxed at the residential rate of Class 2, which is $1.2156 per $100 of assessed value.

The bill would prevent a change in the assessment of a property until homes were actually built. Assessors could not use the plans for the property as the basis for determining its value. Instead, they would have to wait until the property has changed to correspond with the proposed use, according to the bill.

The Senate bill would do more than just keep the county from being able to charge developments at the higher commercial tax rate, county officials said.

Since most developments are built on farm land, the planned developments would have to be taxed as if they were still farms, county officials said.

The most the county assesses an acre of farm land is $350 per acre, which generates $4.25 per acre in property taxes, Bordier said.

The same land subdivided for a housing development might be assessed conservatively at $5,000 or more per acre, she said.

Under the current system, the lot would generate $121.56 in taxes, since it would be taxed at the Class 3 tax rate and at the appraised value for a subdivision lot, not a farm acre.

Even after the first lot was sold in the development, the rest of the land would still have to be taxed as if it was a farm, said Jefferson County Commissioner R. Gregory Lance.

Jefferson County officials said they have not yet determined exactly how much would be lost in revenue, but they said a lot of land in Jefferson County would have the taxes rolled back.

Berkeley County Commissioner James C. Smith said he does not know how much of an impact it would have, but said a lot of former farm land in the county has been subdivided into developments that do not yet have homes on them, but are being taxed at the Class 3 rate.

"The school board will be hurt even more than the county," Smith said.

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