Thinking ahead to 2012 taxes

Published in the Culpeper Star Exponent Monday, November 28, 2011

What will next year look like when it comes to our taxes? This is a sensitive subject and yet one that we must face considering the challenges in our economy. Though there is good news for our local economy on many fronts. The revenue into our local governments will force us to make decisions about how to save money while growing our economy.

In essence, economic growth is a driving solution to the revenue challenges faced by local governments. The more meals eaten out, the more hotel rooms filled, the more our retailers sell, the more our professional services sell, the more our businesses produce and sell, the better our tax revenues. Buy Local!!! Simple right!

Let’s look a bit closer. There is one part of the equation that is not addressed in the list above, home values. Our tax revenues are based on the assessed values of homes. This is a significant factor in revenues for our local governments. The foreclosures have depressed values to a point that revenues are also depressed. Local governments often “equalize” the tax rate to offset the decrease in revenues from lower assessments.

So, if we are to see a broad base revenue increase from improved real estate assessments then the values need to increase. In order for the values to increase there must be demand, right? So how do we increase demand for local housing? Of course recruiting business to create jobs is one solution, and yet this takes time to impact the values.

So, what is another solution? My research suggests that home values in Northern Virginia are stable and increasing. We are typically subject to a timed ripple effect in Culpeper. Market improvements in NOVA usually work their way out to Culpeper... eventually? This is where we have opportunity. My theory is that we can bypass the ripple effect with strategic invitations to NOVA buyers by pooling our marketing efforts.

Today’s “strategic digital marketing” allows us to send targeted intuitive messages online, optimizing dollars for uniquely productive results. The new marketing efforts can find buyers ready to buy and deliver them to Local Real Estate Agents. A big issue for our local real estate agents is that buyers in NOVA initiate contact with NOVA agents and “drive until they qualify”. We need our agents to be the expert that these buyers find when searching for housing solutions and deliver them to Culpeper.

Local Agents are the ones that contribute to our local non-profits, charities, and youth sports teams. Supporting them and finding a way to deliver out of market buyers to them and to Culpeper can be a critical part of our economic success formula. Absorbing foreclosures, increasing demand for homes, and finding buyers for our area has potential to bring our community to a preferred level of prosperity.
 Stimulating local real estate is not a “pro growth” message. It is a building block to economic improvements. We need our local real estate market to improve in order for our local economy to support local needs: funding for schools, funding for emergency services, revenues for local business….
 The sooner we employ “Strategic Digital Marketing” the sooner we will see the potential results.

Jim Charapich is the President/CEO
Culpeper County Chamber of Commerce