Fredericksburg City Beat

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Pamela Gould reports on City Hall. You can reach her at 540-735-1972 or Robyn Sidersky reports on city schools. You can reach her at 540-374-5413 or

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How much are taxes really going up?

The folks who spoke at last night’s public hearing talked about the council’s proposed 26 percent increase in the real estate tax. That number comes from comparing the current, pre-assessment rate, with the proposed, post-assessment rate. It appears again in Chamber of Commerce President Bob Hagan’s letter to the editor warning council members that this decision would disproportionately hurt business owners.

The actual percentage of tax increase that individual property owners will see varies greatly. In the numbers I looked at, I found that owners of Central Park townhomes would see a 16 percent tax decrease. The Silver Cos. would see an increase of as much as 88 percent in the tax bill for property in Celebrate Virginia. Homeowners in Great Oaks and the Preserve at Smith Run would see tax reductions in the 10 to 20 percent range. Some of the commercial properties on Caroline Street would pay 15 to 25 percent more in taxes.

But the point Hagan was trying to make, and much of the debate last night, was over how to spread the burden equitably between two broad classes of property owners-commercial and residential.

In an e-mail exchange with council members (responding to a question from Tomzak), Hagan explained why the 26 percent number is appropriate when talking about business properties. He wrote:

The increase for residential property is 6.8% thanks to the OFFSETTING DECREASE in assessment.

The increase on commercial property is 25.9% because there was NO offsetting decrease in assessments.

That means it is not ‘just an increase of $0.045’ but an increase of $0.145 to business property owners.


The math is the increase from the current rate of $0.56 to $0.705 ($0.145) divided by the current rate.

That is $0.145 divided $0.56 or 25.9% which was rounded in the letter to 26%

Commercial property assessments were essentially flat.  Hence the tax increase to anyone with a flat assessment amounts to 26%.


(Residential property owners whose assessments dropped by the average, would, of course, expect to see an increase of $0.045 over the equalized rate of $0.66 for a total of 6.8%.  The ‘equalized rate’ for businesses that have a flat assessment would be to keep the current $0.56. For business property owners therefore, the 26% or $0.145 is entirely a tax hike).


Again, I appreciate the question since it helps to demonstrate the inequity resulting from only looking at an “equalized” rate that applies to residential property whose value FELL, but having to apply the same rate to both residential AND commercial property.


Post tags:


  • lgross

    in the price of goods and services – that citizens
    pay anyhow?

    that’s the part that I don’t quite understand
    because any business that sells goods and
    services has expenses and those expenses
    cannot be “absorbed” if they end up making the
    business unable to be profitable – so most
    business do the same things with taxes that they
    do with water, sewer, employee salaries, etc –
    they incorporate those costs into the selling price.

    It’s called “overhead”.

    so… why does it matter if a burger in
    Fredericksburg costs $2 or $2.25?

    Was Hagan speaking for ALL region-wide
    businesses or just Fredericksburg Businesses?

    I can see the point if Spotsylvania businesses
    sell the same burger for $2.. and everyone flocks
    to Spotsylvania to buy their burgers.

    so who was Hagan speaking for?

  • tpkeller

    Is Mr. Hagan proposing that we create a dual class tax rate structure, one for commercial property and one for residential property?

    You think we have trouble now, imagine what a Pandora’s Box that would be!

    Property taxes are tied to the value of the property. Property values fluctuate. This is a fact of life. After the next assessment, it may very well correct itself, and perhaps even further swing in the other direction.

    It is a testament to the prospect of future business success in the city that the commercial values did not fall along with residential values. Would you prefer to have many businesses “under water” in debt as many city home owners now find themselves to be?

  • lgross

    there may be some other, more egalitarian ways
    to collect a fair share from each individual rather
    than have winners and losers with each new

    but there are two huge obstacles to it

    1. – the Dillon Rule pretty much forces localities
    to use property and sales taxes.

    2. – taxes on businesses if they get too high can
    encourage some kinds of businesses to move to
    the adjacent jurisdiction.

    so .. one path .. taxing consumption.. is limited
    by Va but even if they allowed it.. localities could
    keep a lower tax to have lower prices and siphon
    off customers from the higher taxing jurisdiction.