Since BPOL rates were changed for the 2008-2009 fiscal year in Christiansburg, let's examine what this equates to for businesses grossing a nominal $250,000 in all sales receipts for one year. (Remember, gross is before any expenses are allowed or factored.)
So, even though residential real estate taxes did not increase this year, the cost of living in Christiansburg is directly affected by this change in BPOL. Why? Because higher taxes are added to other cost increases facing businesses -- like higher utilities, gasoline, insurance, inventory and payroll costs. These are absorbed to a point, but must generally be passed on as higher prices to customers. That's you and me, town citizens. From the last post on this topic, readers have shared that the Wholesale rate was reduced to conform with changes in the State Code -- interesting, because it's been reported there are NO limits to increasing meals or lodging taxes.
At some point, customers curtail buying or shift spending habits in managing to stay within their own budgets, attempting to cut costs and avoid debt. When business declines, they may move to a better location or just close their doors with resulting loss of jobs. Simple market economics.
With Christiansburg's primary tax revenues derived from rapid residential and retail growth, Town Council must find a way to continue feeding a budget which has doubled over the last decade. Even when 23% of that budget came from folks eating out, and a smaller amount coming from visitors paying lodging taxes.
Note that retail BPOL taxes are jumping 50% at a time:
- when the regional, state and national economies are soft,
- when one entire quadrant of the regional mall area already sits vacant,
- when real property values in town are stagnate or trending downward
- when new commercial centers are under development or on the drawing boards outside town boundaries.
It may make it appear there's not much in the way of incentives for retailers to stay in Christiansburg. To offset possible reduced or flat BPOL revenues or diminishing property values, what taxes or rates will be increased next? Or will services be reduced? Town spending curtailed?
Time will tell. Our guess is that town residents should not hope local taxes will be reduced or even stay flat, but will continue to increase. This year's "tax breaks" seem to have gone to what is a very small segment of the town's current economic base.