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Beach commissioner stirs city sticker pot
VIRGINIA BEACH- Philip J. Kellam, the city's commissioner of revenue, faces a sticky situation.
The Democratic commissioner is running for re-election this fall on a call to ditch city stickers, the colored decals residents must display on car windshields to prove they paid personal property taxes. Kellam scorns the sticker as a 1960s-era fossil. In another year, when the so-called Virginia car tax is scheduled to be phased out on vehicles worth $20,000 and less, only about one in five Virginia Beach car owners will even owe a tax, he estimates.
So why make people scrape the hated stickers off their cars and stand fuming in line for hours to buy one before the annual February deadline?
His campaign website, www.nocitysticker.com, is reminiscent of the populist "No Car Tax" pledge that carried Jim Gilmore into the governor's mansion in 1997.
But Kellam's political crusade is not so popular in City Hall. The reason? Money. Millions of it. And that is the sticky part.
Last year, the $25 fee most residents pay for a sticker raked in $7.8 million. The process also flushed out another 2.5 million in delinquent car taxes last January and February. Combined, that's enough money, for example to run the City's Department of Museums and Cultural Arts for a year, with a couple of million left over.
His Republican opponent, Rickie L. Richards, calls Kellam "irresponsible" for advocating the decal's demise without offering ways to replace the lost revenue, and accuses him of sloganeering to win votes. One council member, Reba S. McClanan, recently suggested abolishing the commissioner's office to save money.
Irritated city leaders point out that abolishing the decal is a decision for the City Council, not Kellam.
Even Kellam's backers are leery.
"I support Phil Kellam, I want to be clear about that," Vice Mayor William D. "Will" Sessoms Jr. said. "But we just can't give up $7.8 million. That's the reality."
If Virginia Beach ditches the decal, it would be the first major locality in Virginia to do so.
The publicity generated since Kellam kicked off his campaign last spring jump-started a city committee studying ways to streamline the issuance of the decals. In a June 29 memo to the city council, City Manager James K. Spore said the committee is "looking at how best to eliminate the requirement for the vehicle decal while preserving the revenues needed to fund schools and services of the city. . .Options include raising the real estate tax and cutting services."
Finance Director Patricia Phillips, the committee head, said she aims to issue recommendation before the Nov. 6 election. Phillips said she hopes the committee can at least find ways to improve the decal-issuing process, if it recommends not to eliminate the sticker.
"There's a lot at stake, " Phillips said. "I really don't think the $25 fee is the issue, as much as the process we go through to issue it to the taxpayers."
Kellam acknowledges placing "a hot potato in council's lap." But he argues that the sticker is outdated and that the problem is an unyielding city bureaucracy.
"It's not about the money. It's about treating the taxpayer as a valued customer," Kellam said. "They can study the pants off it, but if there's a commitment to do away with an unneeded process, we could eliminate the decal in 2002."
Kellam said city stickers, used by localities statewide since the 1960s, were meant to help commissioners of the revenue identify vehicles to assess for personal property taxes. Before that, metal tags were used.
But for the past two years, Kellam instead has located autos using the state's motor vehicle registration list, which he said is accessible through computer technology and is more accurate and complete.
Further, he said, the Division of Motor Vehicles can help localities collect delinquent taxes by refusing to issue state license tags until the tax is paid.
When the car tax is eliminated on the first $20,000 of a vehicle's value, only 18% of the cars in Virginia Beach would be subject to a tax, Kellam said. So why, he asks, should people who don't owe a tax be forced to buy a decal designed to ensure payment of it?
Eliminating the requirement would also end the hours-long lines - what he calls the "cattle drive" - that snake through City Hall as resident scramble to buy one before the Feb. 15 deadline. Kellam said that sticker has become merely a "cash cow" for the city.
City Treasure John T. Atkinson, a Republican who is Rickie Richards' boss, calls the stickers "an effective, inexpensive tool" to ensure that residents pay personal property taxes.
The long lines can't be blamed on the decals, Atkinson argues. Of the 275,005 decals sold last January and February, two-thirds were issued by mail rather than over an office counter. In 2000, the office issued 254,570 decals.
"Delinquents create lines, not the decals," he said.
Atkinson also said more people than Kellam estimates will continue to pay a tax as the price of vehicles rise.
Five council members interviewed recently said they could support abolishing the stickers but were not willing to give up the money they generate.
"I really think we should eliminate the sticker if at all possible and replace it with some other revenue source, " said Councilman Margaret L. Eure.
Kellam said he intends to stick to his guns. "I know I'm right on this issue, " he said. " I hope common sense prevails."