Prince Edward County And Farmville Should Consider Service Fee For Tax-Exempt Properties

Published 4:10 pm Thursday, May 10, 2012

In Prince Edward County, there is $335,322,400 worth of real estate assessments on property that is tax-exempt.

The County is not collecting a penny in real estate tax from those properties. Nor is the Town of Farmville, considering that Longwood University figures very prominently in the county-wide total

Those $335,322,400 equal an estimated 22 percent, or more than one-fifth, of the real estate assessments-a great big chunk of change that could help pay for local government services. It may not be a pot of gold at the end of the rainbow but it could be more than a rainy day fund.

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Most notably it could help Prince Edward County fund public education, which continues to be on the receiving end of insufficient state funding and a lack of funding from the Board of Supervisors to make up anything like the difference.

Nine counties and 11 cities in Virginia charge a service fee on tax-exempt properties. Prince Edward County should certainly consider joining them, as should the Town of Farmville.

Not on every tax-exempt property. Not on churches, for example. But Longwood University and Hampden-Sydney College own so much real estate that could also contribute, through taxation, to meeting the very real challenges faced by local governing bodies struggling to meet their responsibilities to the community.

It is difficult, for example, to imagine either Longwood University or Hampden-Sydney College pitching a persuasive argument against paying a service fee, in lieu of real estate taxes, to contribute toward the funding of Prince Edward County's public school system.

An appropriate service fee could keep educational programs from being eliminated from Prince Edward County classrooms. What kind of argument against doing so would sound right coming from two institutions of higher learning like Longwood or Hampden-Sydney? Especially if the service fee revenue were to be dedicated to public education.

One can almost feel the heat rising under certain collars at H-SC and LU but let's be clear that the advocacy of Prince Edward County and the Town of Farmville considering service fees on certain tax-exempt property is made with full appreciation of the economic impact contributions by both institutions of higher learning.

Both the college and the university provide so much employment, their students spending so many dollars in the local economy to create and sustain jobs and contribute to sales tax revenues and business, professional and occupational license tax fees that are based on income.

And I know that Longwood officials will point to the retail component of Mid-Town Square and argue that it provides more local revenue than the former shopping center at the end of its days. But that point doesn't argue convincingly against additional revenue, desperately needed to fund public education, being justifiably raised from that and other properties.

Appreciation here for the importance of both Longwood and Hampden-Sydney is unrestrained. However, the fiscal pressure on Prince Edward County to rise to the challenge of providing its public school system with the funding necessary to achieve its full potential has created the necessity of looking for additional revenue, especially when so much land of such value is going tax-free.

Surely, there must be a balanced fee that can be developed to provide crucial additional revenue for Prince Edward County and the Town of Farmville, which is responsible for providing so many services within the County seat, without wounding LU and H-SC.

There needs to be a thoughtful approach, obviously. As reported by the Herald, Prince Edward County Administrator Wade Bartlett told County Supervisors that, “Such a service charge can be placed on all real estate which is exempted from property taxation. Certain criteria must be met to allow the service charge to be placed on property owned by the Commonwealth. Such criteria do not apply to the placement of such a service charge on exempted property not owned by the Commonwealth.”

If Prince Edward County's research and deliberations determine that Longwood University can be charged a service fee then it should be considered, for the reasons previously stated, along with a fee on H-SC.

Mr. Bartlett has rightly noted “this revenue stream has the potential to be a significant source of funding.”

The County's Board of Supervisors has a responsibility to its taxpayers and it cannot simply ignore a possible revenue stream of such magnitude. There is much study to be done by the County, and the Town, too, should it look to levy a service charge of its own. But the facts should be determined, placed on the table for discussion by the Board of Supervisors and action, if such a fee is regarded by Supervisors as in the best interests of the County, while doing no harm to those entities now not paying real estate taxes.

Buckingham County is already applying a service fee to the Department of Corrections so this is something that is now benefiting an area locality.

Prince Edward County and the Town of Farmville would be wise to consider joining Buckingham and the 19 other Virginia localities collecting revenue from tax-exempt property rather increasing the tax rate, when there is an alternative, on those now bearing the entire burden.