Fauquier County is prized by many of its residents for its heritage of agricultural businesses, open spaces and rural nature. These aspects represent important quality of life features for many county citizens.
However, questions concerning the fairness of the agricultural “land use” tax rates, versus those paid by businesses or county citizens living in residential developments, have been raised by some.
In order to ascertain whether a tax rate is “fair” or not, however, it is necessary to look at the difference between the tax dollars generated versus the dollars in county services required for each type of development. If a type of development raises more taxes than county services required, it is certainly paying its “fair share” and then some. On the other hand, if a type of development requires more in services than it pays in taxes, that would not appear to be “fair,” nor would that type of development be something we should desire within the county.
Fortunately, such data has been calculated on a regular basis, most recently for Fauquier in 2015 by Terance J. Rephann of the Weldon Cooper Center for Public Service at the University of Virginia.
Called the Cost of Community Services (COCS) metric, this recent measurement shows that for every dollar in taxes residential property generates it consumes $1.17 in services – a deficit of 17 cents.
Commercial properties on the other hand, only consume 26 cents for every dollar of taxes they generate — a 74-cent surplus.
Likewise, agricultural land only consumes 22 cents for every dollar of taxes it generates — an even greater, 78-cent surplus.
From these metrics, it seems clear that more residential development will result in higher tax rates, as the dollars received in taxes will always be exceeded by the cost of the services required. Both agricultural and commercial land uses, however, return more in taxes than they require in services. These latter two types of development would appear to be paying more than their “fair” share in taxes.
Intuitively, at least with regards to agricultural land use, these results make sense. After all, when was the last time someone’s livestock called 911 or asked for more classroom space and teachers?
And, of course, it should be noted that many agricultural landowners live in houses within the property that is in farm use. Those houses and the immediately surrounding land are taxed at full residential rates, even though many of these residents pay for their own water and sewer (wells and septic fields), rather than rely upon county services.
Two conclusions stand out from the COCS data:
- Most agricultural and business properties do indeed pay a fair share of county taxes and actually contribute more to the county coffers than they take out in services.
- Residential property, on the other hand, requires more in services than the tax dollars it generates.
For the future of Fauquier, then, we should be pursuing both agricultural and business development and should be wary of residential development. It is worth adding that as our rural nature is a prominent feature of our quality of life, it would seem reasonable to encourage small business development within the designated service areas.
Dr. Thomas H. Valk
This article was originally published on Fauquier Now here.