Mayor David Tarter testified before Congress yesterday to discuss the impact of the cap on the deductibility of our state and local taxes on federal tax returns, an issue that affects many in our community of Falls Church.
City of Falls Church Office of Communication provides press release.
NEWS RELEASE
Mayor Tarter Testifies Before the House Ways and Means Subcommittee on Select Revenue Measures about New SALT Deduction Cap
Wednesday, June 26, 2019 — Mayor P. David Tarter testified yesterday before the House Ways and Means Subcommittee on Select Revenue Measures about the impact of the cap on the deductibility of state and local tax (SALT) on federal returns. The $10,000 limit was a part of the 2017 tax legislation and restricts the ability of citizens to claim this long-standing deduction.
“It only hurts hardworking families and municipalities like mine,” Mayor Tarter said in his testimony. “When stacked up against the imposing costs of living [in the DC Metro area], many of our residents struggle to make house payments, pay taxes and make ends meet.”
He continued, “[The SALT deduction cap] means that tax dollars that could have gone to the city are now going to the federal government, and there is less money available for essential local services like schools, police, and fire protection.”
You can view his testimony via CSPAN here.
You can read his full testimony below:
Testimony by the Honorable P. David Tarter, Mayor, City of Falls Church, Virginia
Before the House Ways and Means Committee of the United State House of Representatives Subcommittee on Select Revenue Measures
Chairman Thompson, Ranking Member Smith, Members of the Subcommittee, my name is David Tarter, and I am proud to serve as Mayor of Falls Church, Virginia.
Falls Church is a small, independent city of about 14,000 citizens, located on the outskirts of Washington. Our local elections are non-partisan and I was elected as an independent. So, I come here today without a political axe to grind.
That being said, let me be clear about the issue at hand: I believe it is a poor idea to cap the SALT deduction. It only hurts hardworking families and municipalities like mine.
In Falls Church, we ask a lot of our tax payers. We have to. As a city in Virginia, we are independent of a county, and yet must provide the same full range of municipal services – excellent schools, a trustworthy police force, well-maintained parks, and clean streets. Lacking the economies of scale of our larger neighbors, our property taxes are formidable. People choose to live in Falls Church anyway, because I’m proud to say that our town values the right things, like our award-winning school system.
In recent years, we’ve built a new middle school, expanded two elementary schools, and, earlier this month, broke ground on a brand-new high school. All that, plus we are renovating our city hall and library.
These capital investments are expensive, but our citizens view them as a necessary part of maintaining the Falls Church way of life, and as investments in our community’s future.
The median cost of a single-family home in our town is $825,000. That doesn’t buy you a mansion – – more likely a modest brick rambler, built in the 1950’s.
For that, our median City mortgage payer lays out more than $36,000 a year.
So, while our household income may appear to be high, when stacked up against the imposing cost of living, many of our residents struggle to make house payments, pay taxes, and make ends meet.
There are no yachts in Falls Church, just lots of hard-working families trying to get by in the high rent district. Most of the folks that I know are two income families who serve their country though work in government or the military and want the best education possible for their children.
I am not a wealthy man. I have discovered that being a locally elected official is not a financially lucrative career. But like many of my fellow citizens, I now face the prospect of paying thousands of dollars in added taxes because of limitations in the SALT deduction.
Like you, I care about the tax burden on my constituents. Even before this cap, I felt our community was at the top end of its taxing capacity.
The number one issue I hear about when campaigning is taxes – – our property taxes. And indeed, they are burdensome. The owners of that $825,000 house I mentioned will pay over $11,000 in property taxes this year alone.
When you add in Virginia income and car taxes, that same citizen’s SALT payments far exceed the new $10,000 cap. What does that mean? It means that tax dollars that could have gone to the city are now going to the federal government, and there is less money available for essential local services, like schools, police, and fire protection.
The new cap on the SALT deduction double taxes citizens on these payments, and penalizes workers in high cost areas like my City, where wages and income are high, but are fully matched by the cost of living.
To us in local government, the recent SALT limitation also has the look and feel of another unfunded mandate, whereby higher levels of government can claim they reduced taxes, but in reality, they are merely shifting the burden downstream.
That high school I mentioned earlier was built in the 1950’s, with grants and zero percent loans from the federal and state governments.
Today, we are on our own. Our local tax payers are getting no assistance from the federal government, and worse, with the limitation of the SALT deduction, taxes have been effectively raised.
Back home, we agree with that most famous Virginian, Thomas Jefferson, who said, “The government closest to the people serves the people best.”
In Falls Church, we balance our budgets. And we provide necessary services in the most cost-effective manner. Local government is where the rubber meets the road.
We should not be at odds with the Federal government, but instead working in close partnership to create better outcomes for citizens. From where I sit, repealing the SALT deduction cap would be a step in the right direction. Thank you.
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City of Falls Church Mayor P. David Tarter testified on June 26 before the House Ways and Means Subcommittee on Select Revenue Measures about the impact of the cap on the deductibility of state and local tax (SALT) on federal returns. (Photo Credit: National Association of Counties.)
Mayor Tarter,
Why are our taxes in Falls Church so high and what are you doing to reduce them? Why are we building the most expensive high school in the area? Why does Falls Church City keep building luxury apartments that cost more than 40% of people’s income? But the more pertinent question, why are you fighting for a tax break for the wealthiest and not for those that rent or live in modest houses? Why should our highest earners get a subsidy and not those that need it more?
I look forward to the Mayor’s response.
From the WSJ: “Odd moments in congressional debate as House Democrats argue in favor of tax-code change that would primarily benefit high-income households”
https://www.wsj.com/articles/democrats-and-affluent-suburbs-join-to-fight-tax-break-cap-11561503637?mod=e2fb&fbclid=IwAR3TLcejpZLXWUg-YawuI21Xi1NMfG4YppsyEuvMXKUkAjJ5rZHv1TK-ev0
The Mayor does not cite the median income of City residents, unless I missed it. I am not sure that is by design or not. What is that figure, so we can put all of this in proper context? The City is one of the highest in Virginia, isn’t it? The Mayor seems to be trying to shift the blame for higher taxes away from City decision makers to the Federal government.
The tax rate is $1.355 per $100 of assessed value which is in the highest in the area by far. It keeps increasing and I don’t think Mayor Tater does a good job of trying to keep costs low at home. Instead he wants the federal government to help him. 4 out of every 10 households in the City has an annual income of $150K+ and the $200K+ income bracket has grown the most dramatically. Between 2000 and 2017, most household growth in the City occurred with households that have an annual income exceeding $200K.
Appears that Tarter is trying to get more tax relief for the rich. Those making less get no tax relief. Go gettem, Major. Always fighting for the little guy?
If the median income is say $150,000 to $200,000 and you can afford to buy a $1.4 million new home (or an $800,000 older home with another $300,000 in renovations), then you can absorb the $10,000 cap on local taxes.
The Mayor sees an opportunity to shift blame for higher taxes to the Federal government. What the Mayor and his colleagues need to do is look in the mirror and accept accountability themselves for their tax policies that have led to such a high real estate tax rate. Don’t shift the blame. Instead, look for more and better solutions and take action to control and reduce the tax burden. When the Mayor knocks on your door this fall asking for your vote for re-election, challenge him on this. Under his position, folks in Virginia Appalachia and other far less affluent areas should continue to subsidize City and other affluent jurisdictions.
@Dale,
I totally agree with you. Mayor Tarter needs to look at ways to save money within our district. We continue to lose citizens in the lower income levels because they are taxed out of the city. The tax rate is much higher than neighboring jurisdictions and most people can afford the additional taxes, and will pay them, in exchange for smaller schools. This does not help the lower income family that cannot afford a 2 bedroom apartment in the luxury MUD for clost to $3K/month and they cannot afford a modest house (or find one) since the taxes alone are close to, or more, then $1000/month.
I think one of the factors affecting the lack of movement on this tax rate issue here in FC is the diversity of constituents here. By that I mean, there are a number of residents that have been here a long time and so due to purchase price, their mortgage is very low. Some even have their house paid off all together so for these folks the taxes are actually not a hardship, a situation they have certainly earned. Some of them may even feel, that all things being equal it’s a pretty good deal to be able to live here in this small city so close to DC. There are families with multiple children who believe it is worth it to have the opportunity to send their kids to a small school system but plan to move after the last one graduates. Then there are those that live in apartments and don’t feel particularly impacted by the tax rate one way or the other. And then lastly there is a group of folks that are just on their way out because of the tax rate or whatever. So that is a lot of people that are not pushing to bring the tax rate down. So that leaves the people that don’t fall into those groups, perhaps some of those people comment here. That group might include those that have purchased more recently and have a high mortgage and also fork out over a $1000 a month in local taxes (and perhaps wanted to stick around after their last child graduates) It might include retirees who want to stay and those struggling to make ends meet. I think the reality is that the folks who feel that the tax rate is too high are going to have to speak up more at council meetings, bring on some more pressure to our elected council, support candidates that demonstrate that they actually think that the taxes are too high, and perhaps even run for council themselves because short of that I don’t see local tax relief coming anytime soon.
@Alison, I think you are correct whereby there are multiple groups of people that live in FCC but the schools demand over 1/2 of the budget; many on City Council will say it is less, but when you include the debt that the city pays (capital costs), it is much more than 1/2 of our budget. The schools and people with school aged children demand a lot of services and they will continue to get a larger chunk of the budget. Many people have asked for cost share between the city and schools but City Council has never addressed this scenario seriously. Many people have gone to City Council with suggestions (cost share, less expensive or less adminstrators don’t build a new school, traffic calming suggestions, decrease duplicate departments among the schools/city, etc). I have not seen significant budget savings – just more spending.
This is a democracy and a large amount of people have kids in schools and will vote in their best interest. Other’s that vote for increased spending may be willing to pay the higher tax amount and can afford to do so. Many can’t and they will be forced to move or make other financial decisions that allow them to stay.
Truthfully, it’s easier and better to just move to a lower taxed area and let someone else pay for all the debt. City Council and School Boards do this all the time – approve large debt and then let future generations pay for it.
I remember everyone saying we will get tax relief with all the MUDs that were approved. Where is it? Oh, we have more expenses now so the citizens won’t ever see it. Surprise, surprise, surprise.
I’m looking forward to seeing the city’s recent fiscal impact – it’s due about this time of year. Hang on to your wallet!
Mayor Tarter is asking lower income households to subsidize his expensive Little City. Why should the rest of the country pay for deductions of the high income people in Falls Church City? Taxes in Falls Church City are expensive due to policies he initiated and promotes. Look at home, Mayor. Don’t ask for handouts from people who make less than your average household of $200K a year. We can’t afford to help you. Help yourself.