We are puzzled by the financial forecasting decision that Falls Church’s Chief Financial Officer Richard LeCondre presented the F.C. City Council with at its annual strategic planning retreat last Saturday. The always dapper Mr. LeCondre told the Council that a projected two percent growth for the coming fiscal year is his “best case scenario” which, if basic expenditure levels are maintained, would require a three cent increase in the real estate tax rate, up from $1.27 to $1.30.
As was noted by Vice Mayor David Snyder at Monday’s regular meeting, it may not be the best approach to go into deliberations on the budget for the next fiscal year, which won’t begin in earnest until next March, conceding to a tax increase from the start.
That’s especially true when there seems to be no evidence that such an outcome will, in fact, occur. Two years ago at this time, the Council was advised that it would have to produce a zero-growth budget, yet the budget they adopted for Fiscal Year 2012 that ended this June 30 wound up with $3.4 million in surplus revenues, because the City experienced an almost four percent rise in revenues. As we know from events of the last month, the City Council had a difficult time resolving how to deploy that surplus.
Now, before we can yet know what kind of revenues will in fact accrue from the current fiscal year, being only two months into it, the Council has been saddled with yet another arbitrary restraint, one which says that two percent revenue growth is the maximum that can be expected for the following year.
The Council did the right thing, albeit by a slim and contentious 4-3 vote, to put portions of the FY12 surplus to acquiring badly-needed technology upgrades for the schools, and to give something back to taxpayers in the form of a rebate. The latter element of its decision was a recognition that the money in its hands, really, is not its own, but that of mostly hard-working taxpayers who, like all the rest of us, continue to face tough times with the tepid recovery.
But Mr. LeCondre could not point to a single tangible fact to justify his projected ceiling of two percent growth, except a short-term leveling of some of the robust growth in the City’s sales and meals taxes in the most recent period. The big driver of revenue growth for the City will be, as it always has been, real estate values, and there is an abundance of anecdotal evidence that come annual assessment time in January, those values very likely may be almost to the pre-recession rates of growth.
No doubt little Falls Church enjoys the benefits of one of the few regions in the U.S. recovering from the recession faster than the national norm. So, buoyed with “value added” benefits from the reputation of its schools, the City is already beginning to storm back.