Why some call Richmond’s real estate tax ‘unfair’

Posted at 7:53 PM, Sep 06, 2012
and last updated 2012-09-07 09:17:36-04

RICHMOND, Va. (WTVR)—The city loses about $72 million annually because some churches, state, federal buildings and some non-profits are tax exempt. 

It's Thursday afternoon, and the cooks at Firehouse 15 in Richmond's Highland Park prepare for the dinner rush.

They aren't your ordinary workers. Some have spent most of their lives behind bars, or on the streets. 

The non-profit organization Boaz and Ruth helps them move up the food chain.

"We think it really helps to contribute to a healthy bottom line,” Martha Rollins, CEO, Boaz and Ruth, said.

She said that it's always a struggle for any small business to pay taxes, but said that it’s “particularly difficult on non-profits." 

Every year, Boaz and Ruth pays the City of Richmond $20,000 dollars in Real Estate property taxes.

"It's huge,” Rollins said.

Now the non-profit group has asked for tax exemption to keep the organization going.

Rollins said the organization has considered selling some buildings, and has decisions to make with the board.

Currently, churches, state, federal buildings and some non-profits are tax exempt. Richmond taxpayer Enis Guillen called that  "very unfair.” 

According to the City Assessor's office, 23-percent of Richmond's land value is not taxed. The city's tax rate is higher than the surrounding counties at $1.20 per $100 in land value.

Richmond loses $72 million annually on tax revenue, money that Guillen believes the city could really use.

"Because the city should be in better shape,” said Guillen, “if we collect taxes from everybody." 

City-leaders lifted a moratorium on tax exemptions back in January, which has opened the floodgates for non-profits to apply. 

The City of Richmond has a list of requirements to become tax exempt, but it’s approved by City Council on a case-by-case basis.

Monday, City Council members will decide if nearly two dozen non-profit groups will stay on the city’s tax rolls. 

City Councilman Chris Hilbert, who voted to keep the moratorium in place, plans to bring it back. 

Hilbert said that while he appreciates the work of non-profits, he want to make sure the city is being fiscally responsible.