Real Estate Tax Relief Program
City Manager's Office W. Patrick Pate
M~ HISTOR I C HEART. MODERN BEAT.
DATE:
November 18, 2016
TO:
Mayor Parrish and Members of City Council
FROM:
W. Patrick Pate, City Manager
SUBJECT:
Real Estate Tax Relief Program
Wf(
During the FY 2017 budget process, Council requested that the issue of real estate tax relief for the elderly and handicapped be brought back for discussion before the next fiscal year's tax bills were printed with the program information. The Commission of Revenue's Office shared the attached information with the Finance Committee showing that the tax relief program for the City of Manassas provided a greater amount of tax relief as a percentage of real estate taxes (over 2%) than the average of the comparison jurisdictions. The tax relief program in Manassas is also seeing increased participation and has more than doubled from $514,330 in 2008 to $1,135,290 in 2016. The comparisons showed that there are many different formulas used to providing a tax relief program and none of the surveyed jurisdictions were using the same formula. The income formula used by Manassas is also based on a HUD median family income for the Greater Washington Region of $108,600 as opposed to the Manassas median family income of$71,215. The City also uses the definition oflow income instead of the classifications of very low or extremely low income. A variety of options were considered by the Finance Committee that would reduce the cost and growth of this program. The general discussion focused on capping the amount of tax relief available to an individual instead of significant changes to other aspects of this program. The attached memorandum from Commissioner Doug Waldron uses the estimated median house value in the City to show the impact of setting a tax relief cap of $3,600. I would recommend that Council consider a freeze to all aspects of the program and establish a tax relief cap of $3,600 for 2017. I would also recommend that you begin to phase out the partial tax relief portions (10%, 15% and 25%) for incomes above $56,150 over the next three years beginning in 2018. Once that is completed I would suggest that you compare the median family income level of the City of Manassas to the HUD income guidelines of giving tax relief to those making 50% or less of the median family income. If you wish to change the program for the upcoming fiscal year, we need to prepare an agenda item for adoption at one of your next two Council meetings so tax bills can be printed. cc:
Doug Waldron, Commissioner of Revenue Paul York, Director of Finance
To:
Mr. Pat Pate- City Manager
From: Douglas Waldron- Commissioner of the Revenue Subj:
Real Estate Tax Relief Program
Date: October 20, 2016
You and the Finance Committee of the City Council requested updated information and further impact analysis regarding the Real Estate Tax Relief Program. I have attached several pages of updated information regarding income eligibility ranges, neighboring jurisdiction programs, City history and amounts exempted and a table of jurisdiction incomes, poverty levels, housing values and the percentage impact of relief. Using current information, the Finance Committee requested an impact analysis of applying a cap on relief based upon the tax amount for a median valued house in the City. According to the most recent source (US Census/American Community Survey 2014L the median house value in the City was $257,500. At the current combined real estate tax rate of $1.403/$100 of value, the tax amount would be $3,612.73. Using $3,600 as a cap, analysis of those currently in the program at their current income levels shows that 196 people out of the 399 in the program would be impacted by a change and have to pay a combined additional $121,218. Of the 196 total, 152 of these are at the 100% relief level. They would pay a total of $113,652 (or 94% of the new revenue). Of the 152, 20 have income only up to $20,000/yr; 68 have income from $20,000 to $40,000/yr; 64 have income from $40,000 to $56,150/yr. And, of the 152, 73 have house values above $300,000 with 9 of these over $400,000. Of the 196 total, 26 of these are at the 25% relief level. They would pay a total of $5,109 (or 4% of the new revenue). Of the 26 with incomes between $56,150 and $64,573, 16 have house values over $300,000 with 1 ofthese over $400,000. Of the 196 total, 15 are at the 15% relief level. They would pay a total of $1,994 (or 1.6% of new revenue). Ofthe 15 with incomes between $64,574 and $72,995, 8 have house values over $300,000 with none over $400,000. Of the 196 total, 3 are at the 10% relief level. They would pay a total of $463 (or 0.4% of new revenue). Of the 3 with incomes between $72,996 and $81A18, all 3 have house values over $300,000 with 1 of these over $400,000.
History of Real Estate Tax Relief for Elderly and Disabled Gross Income Eligibility Ranges
FY 2008
$ 40,000 - $ 52,000 100/50/25/0
$ 240,000 net worth
$ 40,000 - $ 52,000
2009
100/50/25/0
$ 49,200- $ 71,340
2010
100/25/15/10/0
$ 240,000 net worth
* like PWC, started using HUD numbers $ 340,000 net worth
PWC had and kept 100/75/50/25/0
$ 49,200-$ 71,340
2011
100/25/15/10/0
$ 51,550-$ 74,750
2012
100/25/15/10/0
$ 54,100 - $ 78,445
2013
100/25/15/10/0
$ 56,200 - $ 81,490
2014
100/25/15/10/0
$ 53,400- $ 77,430
2015
PWC kept 2014 figures
100/25/15/10/0
$ 54,800- $ 78,880
2016
PWC kept 2014 figures
100/25/15/10/0
$ 54,400- $ 78,880
2017
PWC kept 2014 figures
100/25/15/10/0 2018
*
s 56,15o- s''81,418
(Prepared October, 2016)
*(next year figures were provided by HUDon 03/28/2016)
Amounts of Real Estate Tax Relief for Elderly and Disabled
CY
#Exempted
Amount Exempted
2008
285
$ 514,330
2009
300
$ 634,409
2010
330
$ 724,420
2011
359
$ 796,155
2012
351
$ 802,465
2013
352
$ 869,909
2014
368
$ 922,231
2015
382
$ 1,061,009
2016
399
$ 1,135,290
Deadline for Application is July 1.
(Prepared October, 2016)
Year changed to HUD numbers
(Up 41.5% over past 5 years)
Real Estate Tax Relief for Elderly and Disabled Gross Income Eligibility Ranges
FY 2008
$ 40,000 - $ 52,000
FY 2009
$ 40,000 - $ 52,000
FY 2010
$ 49,200- $ 71,340
FY 2011
$ 49,200- $ 71,340
FY 2012
$ 51,550- $ 74,750
FY 2013
$ 54,100- $ 78,445
FY 2014
$ 56,200 - $ 81,490
FY 2015
$ 53,400- $ 77,430
FY 2016
$ 54,800- $ 79,460
FY 2017
$ 54,400 - $ 78,880
FY 2018
$ 56,150- $ 81,418
Wash.DC-Ari.-Aiex., DC-VA-MD HMFA (HUD) Median Family Income:$ 108,600 Manassas Median Family Income:$ 71,215
(Prepared October, 2016)
Amount of Relief
Real Estate Taxes
Percentage
$ 1,135,290
$ 56,440,000
2.01%
Prince William County
$ 9,371,800
$ 621,236,645
1.51%
Fairfax City
$
986,758
$ 62,686,962
1.57%
Fairfax County
$ 29,170,712
$ 2,637,116,500
1.11%
Falls Church City
$
$ 49,151,896
0.03%
Loudoun County
$7,766,960
$ 773,830,000
1.00%
Alexandria City
$ 2,831,133
$ 382,088,720
0.74%
Arlington County
$4,500,000
$ 675,200,000
0.67%
Fauquier County
$2,560,000
$ 92,972,886
2.75%
Fredericksburg City
$
174,388
$ 28,615,000
0.61%
Stafford County
$ 1,497,641
$ 149,820,540
1.00%
Jurisdiction
Man~~sas
City
146,489
Source: Commissioners of the Revenue; County/City Finance Departments; Budget Documents (Prepared October, 2016)
Jurisdiction
Median Household Income
Individuals below Poverty Level
Median Housing Value
Manassas City
$ 71,215
9.8%
$ 257,500
Manassas Park City
$ 73,460
8.9%
$222,300
Fredericksburg City
$ 49,454
16.8%
$317,000
Falls Church City
$ 120,500
3.2%
$665,400
Fairfax City
$ 100,584
7.8%
$462,800
Alexandria City
$ 87,319
6.7%
$494,400
Prince William County
$ 98,514
7.2%
$ 323,400
Fairfax County
$ 112,102
6.7%
$486,900
Loudoun County
$ 123,966
3.9%
$443,100
Arlington County
$ 105,120
8.5%
$594,800
Fauquier County
$ 92,078
7.4%
$351,900
Stafford County
$ 98,721
5.9%
$300,000
Spotsylvania County
$ 78,505
9.2%
$245,600
Clarke County
$ 75,508
8.2%
$337,700
HUD Median Income for Metro Area is $ 108,600 Source: US Census/American Community Survey 2014 (Prepared October, 2016)
,,
Real Estate Tax Relief Jurisdiction Programs for Elderly and Disabled
Manassas City (FY 18)
Prince William County
Net Worth Limit
$340,000
$ 56,1SO or less
Full Exemption
$ S6,200 or less
Full Exemption
$ S6,1S1 - $ 64,S73
2S % Exemption
$ S6,201 - $ 64,630
7S% Exemption
$ 64,S74- $ 72,99S
1S % Exemption
$ 64,631 - $ 73,060
SO% Exemption
$ 72,996 - $ 81,418
10 % Exemption
$ 73,061-$ 81,490
25 % Exemption
Over $ 81,419
No Exemption
Over$ 81,490
No Exemption
Fairfax County
Net Worth Limit
$340,000
Manassas Park City
Net Worth Limit
$340,000
Net Worth Limit
$ 1SO,OOO
$ S2,000 or less
Full Exemp,tion
$ SO,OOO or less
Full Exemption
$ S2,001 - $ 62,000
SO% Exemption
$ S0,001 - $ 60,000
SO% Exemption
$ 62,001 - $ 72,000
2S % Exemption
Over $ 72,000
No Exemption
Arlington County (1 or 2 person household)
Alexandria City
Net Worth Limit
$340,000
Net Worth Limit
$430,000
$ S5,9S3 or less
Full Exemption
$ 40,000 or less
Full Exemption
$ SS,954 - $ 68,387
SO% Exemption
$ 40,001 - $ ss,ooo
SO% Exemption
$ 68,388- $ 99,472
2S % Exemption
$ SS,OOl - $ 72,000
25 % Exemption
No Exemption
Over$ 72,000
No Exemption
Over$ 99,472
,,
(Prepared October, 2016)
Fairfax City
Falls Church City (2 person household*)
Net Worth Limit
$340,000
Net Worth Limit
$ S40,000
$ 42,000 or less
Full Exemption
$ 26,200 or less
$ 4,000 relief cap
$ 42,001 - $ S2,000
SO % Exemption
$ 26,201-$ 43,700
$ 3,000 relief cap
$ S2,001 - $ 72,000
2S % Exemption
$ 43,701-$ S4,400
$ 1,000 relief cap
Over $ 72,000
No Exemption
* Income ranges vary for 1, 3 or 4 persons
Loudoun County
Fauquier County
Net Worth Limit
$440,000
Net Worth Limit
$440,000
$ 72,000 or less
Full Exemption (to 3 ac)
$ S8,000 or less
Full Exemption (to S ac)
Over $ 72,000
No Exemption
Over $ S8,000
No Exemption
Stafford County
$ 3S,OOO or less
Full Exemption if Net Worth not exceed $ 300,000 I
$ 3S,001- $ 40,000
SO% Exemption if Net Worth not exceed $ 200,000
$ 30,000 or less
Full Exemption if Net Worth not exceed $ 400,000
Fredericksburg City
Net Worth Limit
$200,000
$ SO,OOO or less
Full Exemption
Harrisonburg City
Winchester City
Net Worth Limit
$ 7S,OOO
Net Worth Limit
$ 7S,OOO
$ 2S,OOO or less
Full Exemption
$ 1S,OOO or less
80% Exemption
$ 25,001 - $ 30,ooo'ยท
7S % Exemption
$ 1S,001 - $ 20,000
60 % Exemption
$ 30,001- $ 3S,OOO
SO% Exemption
$ 20,001 - $ 2S,OOO
40% Exemption
$ 35,001 - $ 40,000
2S % Exemption
$ 2S,001 - $ 30,000
20% Exemption
Maximum Relief Amount shall be$ 1,SOO.
Maximum Relief Amount shall be $ 1,000.
M~ HISTOR I C HEART. MODERN BEAT.
DATE:
November 18, 2016
TO:
Mayor Parrish and Members of City Council
FROM:
W. Patrick Pate, City Manager
SUBJECT:
Real Estate Tax Relief Program
Wf(
During the FY 2017 budget process, Council requested that the issue of real estate tax relief for the elderly and handicapped be brought back for discussion before the next fiscal year's tax bills were printed with the program information. The Commission of Revenue's Office shared the attached information with the Finance Committee showing that the tax relief program for the City of Manassas provided a greater amount of tax relief as a percentage of real estate taxes (over 2%) than the average of the comparison jurisdictions. The tax relief program in Manassas is also seeing increased participation and has more than doubled from $514,330 in 2008 to $1,135,290 in 2016. The comparisons showed that there are many different formulas used to providing a tax relief program and none of the surveyed jurisdictions were using the same formula. The income formula used by Manassas is also based on a HUD median family income for the Greater Washington Region of $108,600 as opposed to the Manassas median family income of$71,215. The City also uses the definition oflow income instead of the classifications of very low or extremely low income. A variety of options were considered by the Finance Committee that would reduce the cost and growth of this program. The general discussion focused on capping the amount of tax relief available to an individual instead of significant changes to other aspects of this program. The attached memorandum from Commissioner Doug Waldron uses the estimated median house value in the City to show the impact of setting a tax relief cap of $3,600. I would recommend that Council consider a freeze to all aspects of the program and establish a tax relief cap of $3,600 for 2017. I would also recommend that you begin to phase out the partial tax relief portions (10%, 15% and 25%) for incomes above $56,150 over the next three years beginning in 2018. Once that is completed I would suggest that you compare the median family income level of the City of Manassas to the HUD income guidelines of giving tax relief to those making 50% or less of the median family income. If you wish to change the program for the upcoming fiscal year, we need to prepare an agenda item for adoption at one of your next two Council meetings so tax bills can be printed. cc:
Doug Waldron, Commissioner of Revenue Paul York, Director of Finance
To:
Mr. Pat Pate- City Manager
From: Douglas Waldron- Commissioner of the Revenue Subj:
Real Estate Tax Relief Program
Date: October 20, 2016
You and the Finance Committee of the City Council requested updated information and further impact analysis regarding the Real Estate Tax Relief Program. I have attached several pages of updated information regarding income eligibility ranges, neighboring jurisdiction programs, City history and amounts exempted and a table of jurisdiction incomes, poverty levels, housing values and the percentage impact of relief. Using current information, the Finance Committee requested an impact analysis of applying a cap on relief based upon the tax amount for a median valued house in the City. According to the most recent source (US Census/American Community Survey 2014L the median house value in the City was $257,500. At the current combined real estate tax rate of $1.403/$100 of value, the tax amount would be $3,612.73. Using $3,600 as a cap, analysis of those currently in the program at their current income levels shows that 196 people out of the 399 in the program would be impacted by a change and have to pay a combined additional $121,218. Of the 196 total, 152 of these are at the 100% relief level. They would pay a total of $113,652 (or 94% of the new revenue). Of the 152, 20 have income only up to $20,000/yr; 68 have income from $20,000 to $40,000/yr; 64 have income from $40,000 to $56,150/yr. And, of the 152, 73 have house values above $300,000 with 9 of these over $400,000. Of the 196 total, 26 of these are at the 25% relief level. They would pay a total of $5,109 (or 4% of the new revenue). Of the 26 with incomes between $56,150 and $64,573, 16 have house values over $300,000 with 1 ofthese over $400,000. Of the 196 total, 15 are at the 15% relief level. They would pay a total of $1,994 (or 1.6% of new revenue). Ofthe 15 with incomes between $64,574 and $72,995, 8 have house values over $300,000 with none over $400,000. Of the 196 total, 3 are at the 10% relief level. They would pay a total of $463 (or 0.4% of new revenue). Of the 3 with incomes between $72,996 and $81A18, all 3 have house values over $300,000 with 1 of these over $400,000.
History of Real Estate Tax Relief for Elderly and Disabled Gross Income Eligibility Ranges
FY 2008
$ 40,000 - $ 52,000 100/50/25/0
$ 240,000 net worth
$ 40,000 - $ 52,000
2009
100/50/25/0
$ 49,200- $ 71,340
2010
100/25/15/10/0
$ 240,000 net worth
* like PWC, started using HUD numbers $ 340,000 net worth
PWC had and kept 100/75/50/25/0
$ 49,200-$ 71,340
2011
100/25/15/10/0
$ 51,550-$ 74,750
2012
100/25/15/10/0
$ 54,100 - $ 78,445
2013
100/25/15/10/0
$ 56,200 - $ 81,490
2014
100/25/15/10/0
$ 53,400- $ 77,430
2015
PWC kept 2014 figures
100/25/15/10/0
$ 54,800- $ 78,880
2016
PWC kept 2014 figures
100/25/15/10/0
$ 54,400- $ 78,880
2017
PWC kept 2014 figures
100/25/15/10/0 2018
*
s 56,15o- s''81,418
(Prepared October, 2016)
*(next year figures were provided by HUDon 03/28/2016)
Amounts of Real Estate Tax Relief for Elderly and Disabled
CY
#Exempted
Amount Exempted
2008
285
$ 514,330
2009
300
$ 634,409
2010
330
$ 724,420
2011
359
$ 796,155
2012
351
$ 802,465
2013
352
$ 869,909
2014
368
$ 922,231
2015
382
$ 1,061,009
2016
399
$ 1,135,290
Deadline for Application is July 1.
(Prepared October, 2016)
Year changed to HUD numbers
(Up 41.5% over past 5 years)
Real Estate Tax Relief for Elderly and Disabled Gross Income Eligibility Ranges
FY 2008
$ 40,000 - $ 52,000
FY 2009
$ 40,000 - $ 52,000
FY 2010
$ 49,200- $ 71,340
FY 2011
$ 49,200- $ 71,340
FY 2012
$ 51,550- $ 74,750
FY 2013
$ 54,100- $ 78,445
FY 2014
$ 56,200 - $ 81,490
FY 2015
$ 53,400- $ 77,430
FY 2016
$ 54,800- $ 79,460
FY 2017
$ 54,400 - $ 78,880
FY 2018
$ 56,150- $ 81,418
Wash.DC-Ari.-Aiex., DC-VA-MD HMFA (HUD) Median Family Income:$ 108,600 Manassas Median Family Income:$ 71,215
(Prepared October, 2016)
Amount of Relief
Real Estate Taxes
Percentage
$ 1,135,290
$ 56,440,000
2.01%
Prince William County
$ 9,371,800
$ 621,236,645
1.51%
Fairfax City
$
986,758
$ 62,686,962
1.57%
Fairfax County
$ 29,170,712
$ 2,637,116,500
1.11%
Falls Church City
$
$ 49,151,896
0.03%
Loudoun County
$7,766,960
$ 773,830,000
1.00%
Alexandria City
$ 2,831,133
$ 382,088,720
0.74%
Arlington County
$4,500,000
$ 675,200,000
0.67%
Fauquier County
$2,560,000
$ 92,972,886
2.75%
Fredericksburg City
$
174,388
$ 28,615,000
0.61%
Stafford County
$ 1,497,641
$ 149,820,540
1.00%
Jurisdiction
Man~~sas
City
146,489
Source: Commissioners of the Revenue; County/City Finance Departments; Budget Documents (Prepared October, 2016)
Jurisdiction
Median Household Income
Individuals below Poverty Level
Median Housing Value
Manassas City
$ 71,215
9.8%
$ 257,500
Manassas Park City
$ 73,460
8.9%
$222,300
Fredericksburg City
$ 49,454
16.8%
$317,000
Falls Church City
$ 120,500
3.2%
$665,400
Fairfax City
$ 100,584
7.8%
$462,800
Alexandria City
$ 87,319
6.7%
$494,400
Prince William County
$ 98,514
7.2%
$ 323,400
Fairfax County
$ 112,102
6.7%
$486,900
Loudoun County
$ 123,966
3.9%
$443,100
Arlington County
$ 105,120
8.5%
$594,800
Fauquier County
$ 92,078
7.4%
$351,900
Stafford County
$ 98,721
5.9%
$300,000
Spotsylvania County
$ 78,505
9.2%
$245,600
Clarke County
$ 75,508
8.2%
$337,700
HUD Median Income for Metro Area is $ 108,600 Source: US Census/American Community Survey 2014 (Prepared October, 2016)
,,
Real Estate Tax Relief Jurisdiction Programs for Elderly and Disabled
Manassas City (FY 18)
Prince William County
Net Worth Limit
$340,000
$ 56,1SO or less
Full Exemption
$ S6,200 or less
Full Exemption
$ S6,1S1 - $ 64,S73
2S % Exemption
$ S6,201 - $ 64,630
7S% Exemption
$ 64,S74- $ 72,99S
1S % Exemption
$ 64,631 - $ 73,060
SO% Exemption
$ 72,996 - $ 81,418
10 % Exemption
$ 73,061-$ 81,490
25 % Exemption
Over $ 81,419
No Exemption
Over$ 81,490
No Exemption
Fairfax County
Net Worth Limit
$340,000
Manassas Park City
Net Worth Limit
$340,000
Net Worth Limit
$ 1SO,OOO
$ S2,000 or less
Full Exemp,tion
$ SO,OOO or less
Full Exemption
$ S2,001 - $ 62,000
SO% Exemption
$ S0,001 - $ 60,000
SO% Exemption
$ 62,001 - $ 72,000
2S % Exemption
Over $ 72,000
No Exemption
Arlington County (1 or 2 person household)
Alexandria City
Net Worth Limit
$340,000
Net Worth Limit
$430,000
$ S5,9S3 or less
Full Exemption
$ 40,000 or less
Full Exemption
$ SS,954 - $ 68,387
SO% Exemption
$ 40,001 - $ ss,ooo
SO% Exemption
$ 68,388- $ 99,472
2S % Exemption
$ SS,OOl - $ 72,000
25 % Exemption
No Exemption
Over$ 72,000
No Exemption
Over$ 99,472
,,
(Prepared October, 2016)
Fairfax City
Falls Church City (2 person household*)
Net Worth Limit
$340,000
Net Worth Limit
$ S40,000
$ 42,000 or less
Full Exemption
$ 26,200 or less
$ 4,000 relief cap
$ 42,001 - $ S2,000
SO % Exemption
$ 26,201-$ 43,700
$ 3,000 relief cap
$ S2,001 - $ 72,000
2S % Exemption
$ 43,701-$ S4,400
$ 1,000 relief cap
Over $ 72,000
No Exemption
* Income ranges vary for 1, 3 or 4 persons
Loudoun County
Fauquier County
Net Worth Limit
$440,000
Net Worth Limit
$440,000
$ 72,000 or less
Full Exemption (to 3 ac)
$ S8,000 or less
Full Exemption (to S ac)
Over $ 72,000
No Exemption
Over $ S8,000
No Exemption
Stafford County
$ 3S,OOO or less
Full Exemption if Net Worth not exceed $ 300,000 I
$ 3S,001- $ 40,000
SO% Exemption if Net Worth not exceed $ 200,000
$ 30,000 or less
Full Exemption if Net Worth not exceed $ 400,000
Fredericksburg City
Net Worth Limit
$200,000
$ SO,OOO or less
Full Exemption
Harrisonburg City
Winchester City
Net Worth Limit
$ 7S,OOO
Net Worth Limit
$ 7S,OOO
$ 2S,OOO or less
Full Exemption
$ 1S,OOO or less
80% Exemption
$ 25,001 - $ 30,ooo'ยท
7S % Exemption
$ 1S,001 - $ 20,000
60 % Exemption
$ 30,001- $ 3S,OOO
SO% Exemption
$ 20,001 - $ 2S,OOO
40% Exemption
$ 35,001 - $ 40,000
2S % Exemption
$ 2S,001 - $ 30,000
20% Exemption
Maximum Relief Amount shall be$ 1,SOO.
Maximum Relief Amount shall be $ 1,000.
