The ultimate subsidy

Published 2:32 pm Saturday, September 30, 2017

The debate over whether Southampton County should subsidize the cost of playing golf at Cypress Cove Country Club has drawn an unusual amount of discussion for a proposed $30,000 budget expenditure.

From most of the comments I’ve heard and read, the issue for people in opposition to the proposal is not the amount of money being considered. After all, $30,000 is a mere drop in the bucket — roughly one-half of one-thousandth — of the county’s overall budget. The issue that most have expressed is that they don’t like the idea of subsidizing a private enterprise with public dollars. There’s a problem with that argument, however, primarily because the county already subsidizes private enterprise with public dollars through the land use program.

The land use program, which is employed by the majority of localities in Virginia, is a very expensive subsidy that directly benefits a relatively small number of Southampton County landowners. It allows for those who own agricultural, forest or open space to pay real estate taxes on a reduced land value, making it more affordable to hold onto the land without having to sell or develop it.

Currently, there are 315,000 acres in the county enrolled in the land use program. That equates to approximately 490 square miles, or 82 percent, of the county’s land mass, that is being taxed at a reduced value. Only much larger Pittsylvania County has more acreage enrolled in land use, but it represents just 54 percent of their total land mass.

The difference in taxable value of those acres in Southampton County assessed using land use value versus fair market value, or the rate people pay on land not enrolled in land use, is $360 million.

Three hundred and sixty million dollars.

Just how expensive a subsidy is that for county taxpayers? Simply put, if all land were taxed at fair market value, the real estate tax rate in Southampton County would only be 67.14 cents versus the current rate of 85 cents. For the average homeowner, that would mean the real estate tax on their $150,000 home would be $1,007 instead of $1,275.

And, yes, this subsidy does benefit a relatively small number of landowners. There are approximately 16,500 separate parcels of land in Southampton County. According to the most recent tax records available, only 2,317 of those parcels, or 14 percent, are enrolled in land use. Those 2,317 parcels are owned by 918 individuals or entities in a county with an estimated population of 18,057. Those parcels enrolled in land use are used for any number of reasons, from farming to timber investment to recreation, all private endeavors, all subsidized by county taxpayers.

In principle, the land use program is good for Southampton County and its residents and should be maintained, as it helps preserve a landscape long cherished by those who call the county home. But there are other assets in Southampton County worth preserving as well, and one of those is the golf course at Cypress Cove Country Club.

It’s true that the golf subsidy would directly benefit only a relatively small number of people, but indirectly it will benefit us all by preserving an important community asset. In fairness, the exact same can be said for the land use subsidy. There are members of the board of supervisors who personally benefit from one subsidy. It will be interesting to see whether they vote for the other.

Tony Clark is publisher of The Tidewater News. He can be reached at tony.clark@tidewaternews.com