The Northern Virginia Daily's Political Depot

A service for our readers outside the Northern Shenandoah Valley... a sampling of The Daily's political coverage, plus unofficial, 'reporter's notebook' stuff. And occasional dry humor...

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Location: Strasburg, Virginia

Tuesday, February 14, 2006

Bill would raise fees for those selling real estate; B1

By Garren Shipley
Daily Staff Writer

WINCHESTER — When the Virginia Senate reworked its transportation plan on Tuesday, it included a major increase in one of the commonwealth’s more obscure taxes.

But one local group affected by the potential change says it intends to fight.

Senate Bill 708 has emerged as the vehicle for the upper house’s plans to raise more money for transportation. Members of the Senate Finance Committee gutted the bill — which had called for a 66 percent hike in the sales tax on cars, among other things — at a meeting Tuesday morning.

In its place, the committee offered a plan that would raise about $210 million per year for local transportation projects through a hike in the grantor’s tax, which is levied on the seller of the real property at the time of the sale.

The tax is currently 10 cents per $100 of assessed value. The proposed increase would bring the tax to 30 cents.

State Sen. H. Russell Potts Jr., R-Winchester, is one of the bill’s patrons. It was reported out of Senate Finance 15-to-0.

Members of the Blue Ridge Association of Realtors think it’s a bad idea — and they intend to tell the General Assembly to look elsewhere for revenue today.

The association, made up of Realtors from Clarke, Frederick and Warren counties, already took a hit when recordation fees were increased in the budget deal of 2004, which raised taxes by about $1.5 billion, said former Del. Winsome Earle Sears,
R-Norfolk, a spokeswoman for the group.

“They can’t keep saying they want everyone to be able to own their own home” and keep raising taxes associated with home ownership, she said.

Back in 2004, legislators went to the real estate well and raised the recordation tax, the fee levied by the state to record deeds, by 40 percent — part of $770 million in new general fund revenue.

SB 708 would triple the state grantor’s levy — which is added to the cost of a new home by sellers, said Sears. The rate would climb from 10 cents per $100 of assessed value to 30 cents, with a local option to add another dime.

In Winchester, that would take the levy on the average home price of $308,503 from $308 to $924. If the city were to enact the local option, the cost would climb to $1,234. The money would go to fund local transportation projects.

“We’ve done our part, so our legislators and governor must protect the Transportation Trust Fund once and for all without raising taxes,” says Brad Boland, the association’s legislative chairman, in a statement.

The idea behind the levy is simple — give local governments more flexibility in how they deal with their own transportation problem, according to talking points distributed by the Senate Finance Committee.

Money raised in a city or county would stay there, but it would be earmarked for transportation. It has the potential to generate $315 million annually for transportation projects, according to committee staffers.

Across the Capitol lobby in the House of Delegates, the tax was dismissed by some Republicans out of hand. The new version of SB 708 contains “three or four new gimmick taxes” said Del. Clay Athey, R-Front Royal, but nothing of substance.

If it is to pass, Senate leaders must bring it forward for a vote by the end of the week.