Virginia Legislature Passed Two-Rate Bill

Nadine Stoner

[Reprinted from GroundSwell, 2000]

A bill enabling the two-rate property tax has been passed by the Virginia Legislature. Josh Vincent reports that Va. House Bill 2663, as amended by the Senate Finance Com., passed the Virginia Senate Feb. 16, 2001 on a 38 yes, 0 no vote. Vincent is the Exec. Director of the Henry George Foundation of America and of the Center for Study of Economics.

The Virginia House, after HB 2663 cleared the House Finance Committee favorably, had passed it on Feb. 6 with a 91 yes to 8 no vote.

The summary of HB 2663 as it passed the House is: "Classification of real property; land and improvements. Permits the City of Fairfax to tax improvements to real property at a lower rate than that imposed on the land on which the improvements are located by creating a separate classification for taxation purposes." HB 2663 was sponsored by Delegate Alan Diamonstein.

Groundwork for support for the two-rate legislation has been going on for several years. Fairfax Councilman Anthony Coughlan had stumbled onto books by Dr. Nicolaus Tideman at the University Library. He then phoned Tideman at his alma mater, Virginia Tech, and Tideman referred him to Josh Vincent at CSE. Vincent came to Fairfax, did a two-rate property tax study and analysis and made a presentation to the Fairfax City Council, to which Coughlan had been elected in 1996.

In 1998 the Fairfax City Council formed a Taxation Task Force, which Councilman Coughlin chaired. The Fairfax Taxation Task Force, comprised of a spectrum of people in the community, endorsed the land value tax for special districts, for commercial districts. Then the City of Fairfax sent a resolution to the General Assembly asking that the City of Fairfax be given authorizing legislation enabling a higher mill rate on land values and a lower rate on buildings. (see Sept.-Oct. 1999 GroundSwell.)

The Virginia Attorney General, asked if it was constitutional to tax land and buildings at a different rate, taxing land higher, issued an opinion Feb. 25, 1998 stating that differential tax rates are constitutional.

The Virginia Municipal League in 1999, working with Josh Vincent, adopted a resolution to the General Assembly to do a two-rate property tax study.

Besides Georgists named above, Virginians (that your editor knows of) Joe Casey, Paul Gagnon, and Nicholas Rosen worked in support of HB 2663.