Austerity and changing social values

Austerity. That word has sure been used a lot over the last few years when the question the politicos liked to ask was, “Do you want to end up like Greece?” Have you been to Greece? It’s actually pretty nice there. With good weather, over 1,000 islands, quaint stucco buildings lining the craggy slopes and Mediterranean  beaches lapping at their feet. But as protests against the austerity move have put some pensioners on the street, protests have increased.

The protests have kept tourists away, furthering the country that depends on tourism as one major revenue source.

Since Chesterfield’s major revenue source has been real estate taxes, county administration has been able to massage the local economy to stay away from any sort of default or huge deficit problem. But there are some dark clouds looming.

One issue is how the county will deal with benefits for part-time employees once the Affordable Care Act (ACA) moves another notch in 2014. Virginia statues states no more than 1,500 hours a year, where Federal officials say they can work no more than 29 hours a week. Any employee who works over 30 hours per week will be an employee that the state will be required to provide health care coverage for. The Virginia General Assembly is in a quandary as to how to handle this new piece of the ACA.

But why are they only approaching it now when the ACA was made law in 2010. In the beginning of 2014 when the Feds will implement a healthcare marketplace, which will allow business and individuals to “shop” for the best medical plan for the best price, at least that’s how it’s being sold. But back to the state and how Chesterfield will deal with the issue: Chesterfield’s department directors have already been brought together to consider how to handle hours for their part timers.

The Governor’s press secretary Jeff Caldwell issued a statement that said in part: “Due to the new requirements of the Affordable Care Act, employers are required to provide health coverage to part-time employees who work 30 or more hours a week.  The proposed amendment to the Manpower Control Program clarifies our policies so that it will be clear to employees whether or not they will qualify for health coverage under an exchange or through the State Employee Health Plan. Final PPACA [Health Care Exchange] regulations have not been issued so we don’t yet know the full impact it will have on Virginia. Special rules for seasonal and variable hour employees are expected to provide some relief.”

Aside from the boogeyman lurking around state and local budgets, in Chesterfield there is another movement to deal with. Today, Wednesday, Feb. 6, (which this column is out ahead of, being written on Feb. 3) a forum is being held, sponsored by the Chesterfield Business Council and the Chesterfield Chamber of Commerce to discuss the issue of home building cash proffers in Chesterfield.

Cash proffers offset the impact, which a new dwelling puts on the county’s infrastructure such as schools, roads, libraries, public safety and parks. Cash proffers are currently $18,966 per unit.

Total amount of cash proffer revenue collected by Chesterfield during the 2010-2011 fiscal year:    $4,421,828. That is about .6 percent of county revenues of about $722 million. The numbers may have gone up slightly last year but not by much.

But $4 million is $4million. That’s a half-mile of four-lane highway, half a library, an arts center, half a fire station or a an eighth of an elementary school. When broken done, it does sound like it does much good. But on the other hand there are still some 40,000 lots out there that have no cash proffer associated with them; the cash proffers have moved  up from at $5,000 in the late 1990s through a gradual increase to where they are now. You must also consider that the $4.5 million collected in the 2010-2011 fiscal year was one of the worst building years since Chesterfield began its residential building rise in the 1970s.

Let’s also consider competition. Builders in Chesterfield say that cash proffers cause the sales price of their homes to increase so much it puts them out of the game. A little research tells us a different story. A new Ryan or HHHunt home in Henrico (no cash proffers) is comparable in price to one they sell in Chesterfield. You figure that out.  

There isn’t much the county can do about the ACA; at this point it’s all done but the shoutin’. But the cash proffer issue is still up for discussion, and part of the discussion should be, how the budget and management department is going to balance the books – not be too difficult now but what about lost revenue in the future? The housing market is already turning around.

If we’re going to complain, what is the solution: Four-percent restaurant-food tax, now available for Chesterfield, more fees and fewer services or higher property taxes? I propose and haven’t changed my position – a graduated cash proffer. Instead of $18,966 per unit, no matter what the cost, how about starting at $2,000 per apartment unit and graduating to about $30,000 for those cathedral size homes that cost over $350 - $400K and then up from there. There’s a logical solution if Chesterfield wants cash proffers. If not, find out how to pay for no cash proffers. Balance the books.

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