Constitutional amendment; assessments of real property and tax rates (first reference). (HJ559)

Introduced By

Del. Jeff Frederick (R-Woodbridge)


Passed Committee
Passed House
Passed Senate


Constitutional amendment (first resolution); real property assessments and tax rates. Provides that assessments of real property shall not increase annually by more than one percent plus the percentage increase, if any, in the rate of inflation. Increases in the rate of taxation on real property are limited to one percent per year. Read the Bill »


Bill Has Failed


07/17/2006Prefiled and ordered printed; offered 01/10/07 079808303
07/17/2006Referred to Committee on Privileges and Elections
01/11/2007Assigned P & E sub: #1 (Marshall, R.G.)
02/06/2007Left in Privileges and Elections

Duplicate Bills

The following bills are identical to this one: HJ56.


Al Aitken writes:

Limits to rising real estate property taxes are long overdue. This bill is essential. Families are being forced from their homes due to unaffordable property taxes.

Waldo Jaquith writes:

There are many fine solutions the problems of rising property tax rates. This is not one of them. It's fundamentally anti-capitalist to pretend that a home is valued at a price other than it actually is. And it's fundamentally wrong to tie the hands of localities' ability to raise revenue.

Give localities the tools that they need to manage growth and adjust taxation rates as is demanded by their citizens. Don't artificially restrain the market.

Jon Sutz writes:

Just like the rest of us, the state has to learn to live within a budget. And that means realizing that it should not have the power to tax people out of their own homes with endlessly increasing property taxes.

The time to pass this bill is NOW.

Ando writes:

The state doesn't have the power to tax people of out their homes - property taxes are local revenues (though of course, this authority is granted by the state, like all local auhorities).

If the state didn't heavily restrict local revenue authority (PPTRA - car tax, last year's telecommuncations reform, etc.) perhaps localities wouldn't have to rely increasingly more on real estate property taxes. It would be interesting to see the change over time in the % of local budgets that are funded through the real property tax to test this hypothesis.

Waldo Jaquith writes:

Just like the rest of us, the state has to learn to live within a budget. And that means realizing that it should not have the power to tax people out of their own homes with endlessly increasing property taxes.

To expand a bit on Ando's comment, Jon, you share a common misconception with many Virginians. What is being proposed here by the state is that localities be forced to cap their taxes. That is no more logical than my forcing you to live within your means, citing the importance of your learning to do so.

If you want your locality to live within its means, you should talk to your city councilor or board of supervisors representative. The General Assembly's role here is providing localities with the tools to come up with creative solutions to this problem as they see fit, such as allowing localities to reassess only when property is transferred, or letting them adjust growth rates in order to provide a release valve for rising assessments.

Richmond tying localities' hands is not the solution. We tried that with the car tax. What happened? Localities had to collect more in property taxes. If we tie localities' hands on property taxes, they'll collect more in something else: food taxes, room taxes, sales taxes, whatever they're empowered to raise without asking Richmond for permission.

Al Aitken writes:

There is obviously much ignorance on this subject. Read the Virginia Constitution. Real estate property tax revenue collection is not a local issue; it is dictated by Article X of our Constitution. Talking to your local officials has not worked; they hide behind Article X, and they listen only to the "special interests" who rely on tax dollars. H.J.R. 559 is similar in function to the very successful California Prop 13. Any lingering financial difficulties in California are a result of their politicians' inability to control their spending. The people of California are militantly loyal to their Prop 13 system. Yet the only subject those in Virginnia opposed to H.J.R 559 care to discuss is revenue. It's time to shift our focus to spending. H.J.R. 559 is not a cap and it is not a tax cut; it is a limit to the rate of property tax increase and it has no effect on actual market values.

Waldo Jaquith writes:

H.J.R. 559 is not a cap

Of course it is. If the goal of this bill is not to cap property taxes, then why do you support it?

Attempting to control property valuation is foolishness. If we're going to have it adjust with the market, it's anti-capitalist to artificially manipulate that. Localities have every ability to control property tax rates. If your Board of Supervisors is unwilling to do so, you should vote them out of office. If your locality does not vote them out of office, then clearly they support their rate of taxation.

Al Aitken writes:

Read H.J.R. 559. "Cap" is not used or implied. Presently, the Virginia Constitution requires properties be tax-assessed at current "fair market" value. Because of that language, many Commonwealth families are experiencing annual double-digit rates of property tax increases that often "force" them from their homes in search of lower prperty taxes. That is going to change. When H.J.R. 559 passes, our constitution will reqire properties be tax-assessed at acquisition value instead, and it will also provide localities with inflation indexed increases in property tax revenue plus some. For example, in the years since Proposition 13 passed in California, localities experienced annual property tax revenue increases on the average of 10 percent. Why? Because it became an acquisition value based system...and every time a property was sold or otherwise transferred, it was reassessed at its then fair market value giving the local taxing authority another boost in revenue. There is nothing anti-capitalist about it. We will not be artificially manipulating anything. Market forces will remain unchanged. But we will be taking back some of the control of our hard- earned money and "giving" it not to government but rather to those who actually earned it...Virginia's families.

Tim Hulsey writes:

Waldo, you've managed to get this issue completely backwards.

I agree with you that any attempt to control property values themselves would be foolish. Price caps don't work; they create artificial shortages and black markets, among other nasty effect. But this amendment has absolutely nothing, nothing whatsoever to do with price controls. If the amendment were to pass, real estate values would continue to rise and fall as the free market dictated. Therefore, the amendment is neither an anti-capitalist nor an anti-market measure, as you claim.

This amendment affects taxation, not price. And because the amendment places limits on the revenue government can collect from people like you and me (thereby freeing up more money for us to spend and invest as we see fit), it is actually a pro-market, pro-capitalist measure.

Vivian J. Paige writes:

As usual, Waldo is correct. The law requires that all property be assessed at 100% of fair market value. Any attempt to limit the increase in the assessment is moving away from the current law. Why not just say that properties will only be assessed at 80% of value? Because they DARE not do that. Instead, by limiting assessment increases to 1%, this bill would effectively do exactly that.

Al Aitken writes:

"Any attempt to limit the increase in the assessment is moving away from the current law."

Precisely! That's what we want. That's what Americans do. When we do not like a law, we change it. The "law" referred to here is the Virginia Constitution, and it thankfully is very difficult to change. But this issue is important enough to go through that process. Families are adversely affected financially when they experience property tax increases approaching 20% or more in many cases. Many are forced to make the unpleasant decision to leave their home in search of lower taxes elsewhere. Others are forced to reduce their budgets because their incomes do not keep up with the excessive tax increases...and that adversly affects the economy. When laws adversely affect citizens, they must be changed. Our founding fathers recognized that and imbedded mechanisms in our law that allow them to be changed.

And remember, HJR 559 limits only tax assessments...actual market values remain unchanged.

Biff writes:

Al, I spent some time in San Diego County a few years ago and saw the effects of Prop 13 firsthand. First, a public school system(statewide) that was one of the best in the nation before Prop 13 has dropped to the bottom quartile in performance since then. In addition, the housing supply is artificially reduced as individuals hold their property speculatively because increased assessment values provide a disincentive to sell. This is part of the reason behind the ridiculous inflation seen in the California housing market. Lastly, this has forced localities to find other revenue sources which has led to a rise in fees for public services like parks, as well as an increase in the cost of building permits. While this law would decrease the amount of a tax, it creates more market distortions and causes localities to skimp on the one thing that is most heavily funded by that tax, education.

Arin Sime writes:

I just made a long winded post to my campaign blog about this, and we sent a press release yesterday in support of it. I strongly support this bill. I think the tax changes will have a nice side effect that I don't think has been mentioned here yet. Unpredictable and increasing local taxes which are based on assessments put a very large increased tax burden on those in our communities often least able to pay it: those on fixed incomes, elderly, and long term residents. Especially in the case of long term residents who may have farmed in the area for decades, these very quickly rising assessments can make them consider selling their land rather than paying the additional taxes each year. And if they have a large amount of land, like a farm that's been held in the family for a long time, they are perhaps most likely to sell to a developer that will replace that farm with a subdivision. In other words, increased taxes spur development in rural areas, which is not what most of us want.

This proposal would give those long term residents something they can budget by. Although their taxes will still go up over time, they will be able to budget for it and not worry about it going up 40% in a single year anymore. This makes them less likely to sell, preserving a rural farm. That's good for everyone.

Al Aitken writes:

I appreciate Biff's perspective as he has spent "some time" in California. However, I was born and raised in California and lived there most of my life before moving to Virginia. I am a product of the California public education system, and I have lived many years there before and after Prop 13.

Although I agree the public education system has is not because of Prop 13. It has declined nationwide because in 1963, the teachers unions, which previously had been formed for the purpose of improving education, became a certified labor union and the actual education of our children lost priority and began to erode. Instead, the education industry with its huge and powerful labor union began to concentrate on the accumulation of more revenue and the advance of their multicultural and diversity agendas. As a result, today American children rank toward the bottom in math, reading and science compared to 24 other nations...not because of Prop 13, but simply because of a system that focuses on education input...more principals buildings and more administrative overhead...instead of education educated child prepared to contribute positively to society. This along with most other problems cannot be fixed by simply throwing more money at it.

Prop 13 is also not the reason "behind the ridiculous inflation seen in the California housing market". That ridiculous inflation began years before Prop 13 and in fact was the reason for the wildly increasing property value tax assessments that Prop 13 was designed to cure. Although property value tax assessments were cured by Prop 13, actual market values continued to climb, and sometimes fall, due to natural market forces. For example, my mother-in-law, who still lives in her own home in California, bought her home for $14,000 when my wife was still in junior high. By the time my wife and I were married in 1970, its value had risen to about $100,000. By the time Prop 13 passed in 1978, it had risen to nearly $200,000 and threatened to force my wife's family from their home due to unaffordable property taxes. Prop 13 saved them from that and today, even though her home appraises and will sell for more than $500,000, she's able to afford her property taxes based on Prop 13 limited tax assessments of approximately $170,000.

As I said before, the people of California, save for those involved in the higher levels of the public education industry, are very loyal to their Prop 13 and consider it the best thing that ever happened to them. Expert economists agree.

vernon fischer writes:

I'll support this bill if it's the best we can do but I would rather see a property tax structure based on an idividuals actual ability to pay that could be tied to their Federal Adjusted Gross Income.The counties could opt for an income based adjustable tax rate structure that would have have tax relief built in to it.For example:Single persons or couples earning combined incomes of $0-10,000 the tax rate would be .10/$100 of fair market value. incomes of $10,001-20,000 tax rate would be .20/$100. 20,001-30,000 would be .30/$100 and so forth.The scale could be adjusted as needed to more accurately reflect the economic realities of individuals and localities. This is a basic concept that will need tweaking and development but I think that the concept is familiar,fair and proven.

vernon fischer writes:

The legislature should come home with a realestate property tax rate structure that assures that those of us who need tax relief the most will get significant tax relief even if they have to stay in Richmond until October!!!