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Op/Ed
 
 



YES: The County Is Losing Tax Revenue
 
Sunday, May 04, 2008 - 12:30 AM 
 
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By VIRGIL R. HAZELETT
TIMES-DISPATCH COLUMNIST

Fair is fair. Right is right. Recent commentary deriding an effort to keep millions of Henrico taxpayer dollars within our borders has attempted to inflame passions regarding the solid relationship between the County of Henrico and the City of Richmond.

Of course, everyone is entitled to his or her opinion, but for the astute follower of local government in the region, Henrico County is and will continue to be the single strongest regional partner and contributor. Henrico's relationship with the City of Richmond has never been more solid than it is today. This issue is about the mechanics of tax collection and distribution, not regional cooperation.

This rhetoric has attempted to confuse what is a fairly straightforward issue. Henrico is losing, in conservative figures, $5 million of county revenues per year that could be used to reduce taxes, enhance local services, or a combination thereof. These revenues are being misdirected to the City of Richmond because certain taxes are being paid according to the mailing address. For Henrico County, with more than 84,000 physical addresses exclusively located in the county that all have a "Richmond, VA" mailing address, this situation is particularly acute.

Here are some examples as to how these revenues are misdirected. A Henrico resident with a "Richmond, VA" mailing address buys a computer on the Internet from an out-of-state company. That company collects the sales tax and sends it to the State Department of Taxation and labels the sale as having occurred in "Richmond, VA." The same example applies to Henrico residents with "Richmond" addresses who purchase items from a catalog. The catalog company identifies the sale as having taken place in "Richmond, VA."

A third occurrence involves major retailers with multiple "Richmond, VA" locations (some in Henrico) whose corporate offices are located out of state. The corporate office sends one filing per month to the Department of Taxation for all of the "Richmond" locations. The misdirected revenues have one common denominator: They are paid according to the mailing address.

WHILE MISTAKES are inadvertently being made, we have a responsibility that our residents receive the highest level services for taxes generated in the county. With more than 25,000 businesses in the county, it is estimated that there are more than 3 million taxable transactions each year; the sheer volume of those numbers is daunting. These mistakes, however, can be corrected without undue burden on the citizens and businesses of Henrico.

The U.S. Postal Service (USPS) issued a press release on March 25, 2008, in order to clarify several points. Two major points involve the continued appropriateness of the use of "Richmond, VA" as an acceptable alternate address and the fact that residents do not have to make changes to their personal accounts or monthly bill statements. Those changes will occur naturally and over time.

The USPS press release states: If approved, "Henrico, VA" will become the preferred community name in the last line of a mailing address, effective at the end of the year, while "Richmond, VA" will be considered as an acceptable (or alternate) community name within the address. A formal change-of-address process will not be required or accepted, and ZIP codes will be unaffected. So our residents and corporate entities with pre-printed stationery or address labels may continue to use them. This issue is not and never has been about personal mail; the reality is that the USPS delivers mail according to ZIP code.

COMMENTATORS HAVE also suggested that a physical address somehow constitutes a "region." Of course, when one looks at other regions, such as Cincinnati, what one will find is a region that traverses 15 counties and three states. Go farther north to Minneapolis-St. Paul -- that region crosses through two states, 13 counties, and 186 cities and townships. The reality is that a region is defined by the collective spirit, hopes, aspirations, and diversity of the residents that make up that region. A region is not simply defined by an address.

Ultimately, the question for our residents is: If the officials responsible for managing your county and its fiscal house are aware that at least $5 million per year is slipping out of the county because of a mailing address issue and they do not make a serious effort to eliminate that seepage, what does that say regarding those officials?

I sincerely hope that you will vote "yes" on the survey.
Virgil R. Hazelett is Henrico's county manager. Contact him at (804) 501-4257 or find out more at www.co.henrico.va.us.

 

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