The City's Tax Uncollection Policy
RVA 5x5 - October 9, 2025
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The Mayor and City Council are set to debate reducing or maintaining the property tax rate next week and the outcome, while not preordained, is most likely to remain at the same $1.20 per $100 of assessed value. That means if you own property, your tax bill to the city will be higher because the average assessment increased 5.74% while some increased 15% or more. It also means that if you rent, your landlord’s tax bill is going up and most likely, so is your rent. It’s pretty simple; if you pay more on an airline flight, you get a better seat and meal. If you pay more to City Hall, you should (theoretically) get better services and customer service. Both of those have suffered in the last decade even though the city’s budget funded by real estate taxes has almost doubled, from $237.8 million in 2018 to $442.2 million in 2024.
The annual tax rate, “Tastes great, less filling” debate, which will be taken up by Council next week, is not the topic for today (that is coming tomorrow). Before that debate about whether your tax bill or rent will go up or not, there is the question of why has there been a decade plus of strong revenue growth to the city treasury but no relief for residents? As assessments and tax bills keep increasing and the rhetoric becomes about the haves and have nots, it is very worth noting that the city “leaders” that complain about not having enough revenue are also not doing enough to collect what is owed, even after 10 or 20 years.
Samuel Parker, at what’s left of the Times-Dispatch, reported this week that the city has an outstanding real estate tax delinquency of $31.3 million. After COVID, the city apparently stopped going after those in arrears and the amount outstanding to the city is over $30 million for delinquent real estate taxes and nearing $100 million for all outstanding taxes. What’s even worse is that, by law, after 20 years of being in arrears, the tax owed is removed from the books and can no longer be collected. There is no corner of the city that does not have numerous tax delinquencies; they are everywhere, and yet the city has abandoned the policy of pursuing people to pay up, instead relying on those of us suckers who pay their rising tax bills and rents every year to fund the budget.
Graphic: City’s Open Data Portal
In response to questions about why the city’s Finance Department stopped collecting back taxes in the wake of Covid (which was an excuse for everything by the Stoney administration), city spokesman Michael Hinkle told the RTD, “previous leadership” at some point decided to “suspend collections efforts. While collection activities have not yet resumed, they are under review with an intent to do so.”
Parker wrote: While the indefinite pause occurred at some point in 2020 or 2021 — officials didn’t specify precisely when the decision was made, or by whom — it’s not clear why there were millions of dollars in outstanding real estate taxes that went uncollected in the two decades prior to the pandemic, well before officials chose to freeze collections.
That’s encouraging.
It’s worth pointing out here that the Finance Department was falling apart the post-Covid era in Stoney’s second term (like the water plant), and the efforts to collect delinquent real estate (and other) taxes were as ineffective as the rest of the department. Their focus was apparently not on collecting back taxes but instead on sticking it to restaurant owners that led to the meals tax fiasco, sending out 66,000
incorrect personal property tax bills, mangling the rebate check debacle earlier this year which took four months to correct, and mailing 33,000 tax bills to property owners instead of banks and mortgage lenders. When then-Director Sheila White appeared before City Council last fall, she said it would be a grave mistake to replace her as Director because any leadership change would undo all the “progress” made under her stewardship. (White was replaced in June when the CAO Donald came on board at City Hall). Instead of making an effort to collect delinquent taxes to help offset the rising assessments for homeowners and renters, the city slacked off instead, and the numbers are mind boggling.
Using the city’s (unaudited) monthly financial report data, the reports from July 2021-2025 reveal the delinquent real estate tax situation at the beginning of each fiscal year (the July 2021 report marks the start of Fiscal Year 2022, and so on; numbers are rounded).
What’s perhaps more alarming is the steep rise in delinquent personal property taxes in recent years, which dwarfs the delinquent real estate taxes. For the last two years, those numbers are unknown and still “under review for accuracy,” as noted in those reports. In FY2024, which ended June 30, 2024, the city collected about $442 million in real estate taxes and $80 million in personal property taxes, while there is a guesstimated $71 million still delinquent between those two tax sources.
Parker reported in the RTD: Asked whether officials feared that failing to collect delinquent real estate taxes could create the impression that the taxes were functionally optional, [city spokesman] Hinkle said he “can’t really weigh in on that,” but reiterated that officials are “looking to resume” collections.
8th District Councilwoman Reva Trammell told the RTD the situation begs a critical question: why would Richmond residents and business owners pay their real estate taxes at all?
“That’s what I want to know,” an incensed Trammell said. “They’re basically just telling people that they don’t have to pay.”
Trammell brought up the point that some people are paying penalties and fees for paying late or getting on a payment plan to get the balance to zero while others aren’t paying at all and are not being pursued. “It’s not right, it’s not fair to the people who have lived here and paid all their taxes every year,” Trammell said. “And it just looks like nobody cares.”
What is just as disconcerting is that the only reason this issue ever saw the light of day was not because someone came up with a plan to collect the back taxes. It was due to the unfortunate tribulation endured by Marvin Grimm. He was wrongly convicted of murder in 1975 and spent more than 40 years in prison before being exonerated and released last year. The General Assembly’s new law required the state and the city to reimburse Mr. Grimm $5.8 million each and when the city dragged its feet in coming up with the funds, Governor Youngkin threatened to suspend transferring state funds to the city per the new law.
As the city scrambled to find the funds without altering the budget or dipping into the city’s rainy day fund, they miraculously “found” a stash of $9 million that was supposed to be going to the Affordable Housing Trust Fund (AHTF) but was just sitting in an account. The pot of gold was from the city’s delinquent tax sales fund which was growing after the sale of properties in tax arrears/default the city seized in court and sold at auction. $1 million of that money was supposed to go to the AHTF each year as directed by a 2019 ordinance, which apparently was ignored until the Grimm case uncovered it.
During that process of appropriating the funds for Grimm, City Council Chief of Staff RJ Warren inquired with Chief Administrative Officer Odie Donald in mid-August on behalf of Council about the city’s collections in general. He requested a “comprehensive list” of properties with delinquent real estate tax balances and inquired about collection methods and effectiveness and resources to collect more. Donald replied with a lengthy list of properties and also wrote, “The suspension of collection activities during the pandemic, coupled with the delayed resumption, has significantly limited the city’s ability to recover outstanding balances.”
So the Grimm case not only uncovered that the AHTF money was not being properly allocated as directed by law, it also uncovered the city stopped going after those who owed delinquent taxes. The reply from Donald and the Mayors’ press office also revealed there is no strategy or plan (or urgency) as of yet to resume it, just “an intent to do so.”
Mayor Stoney offered a tax amnesty program in 2017 for delinquent taxes (except for personal property) when the city had 5,800 tax delinquent properties. That program offered those in arrears a chance to pay up penalty free. At the time Stoney talked tough and said, “For 20 years we have basically ignored money that has been left on the table” and that the city was turning a blind eye to tax delinquents and the more it continued there would be less money for schools, public safety, and arenas. He also warned, “Once that grace is over, that is the time that we’ll come after you.”
The result was the collection of $2.8 million in payments and people who set up payment plans to pay off their balance within six months, and the tough talk continued: “We chose to offer an incentive before initiating more aggressive collection measures for delinquent taxes,” Stoney said.
Instead of the “aggressive collection measures” Stoney promised, at some point they turned to passive and then were just turned off completely while the amount of delinquent taxes owed to the city has steadily climbed to stratospheric levels (and amnesty is not a long term solution to collecting the ridiculous amount that has ballooned in the last few years).
Even though the city admits there have been no collection efforts undertaken by the Finance department in recent years, the comprehensive financial audit filed with the state shows that the city still collected $5.7 million of delinquent real estate tax in FY2022, $10.8 million in FY2023, and $10.7 million in FY2024. If the city was not going after delinquencies during these years, as the CAO admitted, one could assume this money was being paid late (in the weeks/months after the close of the fiscal year) or from people who fell behind but just needed some time to catch up. If that is the case (and hopefully your Councilperson will ask the administration to explain this mess), it would go a long way to collect the money owed by people who game the system and are five, ten, or fifteen years behind trying to get to the 20-year write off.
The city should also have a plan and offer assistance to help people who need it and are honestly trying to get their balance to zero; and no one should be thrown out of their home (you might recall that in 2023 the Stoney administration threatened 21 people who were behind on taxes with a forced tax auction while they were still living in their houses). Last year during the tax rate debate, Stoney proposed (and Council approved) his RVA Stay plan. It offered a one-time four cent real estate tax rebate; the Richmond Freeze program exempted anyone 65 and up or permanently disabled from any tax hikes; and the “Gap Grant Pilot Program” was to give up to $200 a month for 6 months to anyone spending 30% or more of their income on housing. The rebate was processed months behind schedule this spring, but there has been no visible movement or success on the other two aspects of the program. Perhaps an update is forthcoming in next week’s tax rate debate with Council.
The steady rise of money owed and the clear failure to collect back taxes has not been brought up or investigated by City Council, and the former Mayor clearly didn’t talk about it during his second term (like the water plant), and Mayor Avula also didn’t advertise it (or know about it) during this year’s budget sessions. It’s beyond clear something needs to be done, and fast. Explanations are needed for Council and the public about why and how we got here; a strategy and action plan are necessary to reduce those numbers and start collecting what is owed; and urgency should be paramount to make sure taxes that have been in delinquent for 18, 19, and coming up on 20 years are collected before they disappear off the books. It’s unclear exactly how much revenue the city has lost in the last decade by allowing delinquent real estate tax balances to expire after two decades (another good question for Council to ask and get an answer), but it is undoubtedly in the millions, if not tens of millions.
It is inexcusable to steadfastly claim the city must maintain the current tax rate because every dime is desperately needed for so many things when there has been and still is no plan to collect almost $100 million in delinquent taxes. At the same time, some of the same “leaders” continue to tell property owners and renters year after year after year to just suck it up. The city has made it policy to not bother people about paying or let them off the hook after two decades, and still lacks a plan to correct or change that policy. They might consider a strategy that resembles a full court press to study and emulate what other cities have done successfully and send collectors, agents, and the calvary out to make sure the city gets what it is owed. If they finally decide to do that, then perhaps, one day, they may even offer some relief to residents instead of continuing to put our city on the fast track to unaffordable.
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