Editorial: Budget Issues That Remain

May 1, 2013 6:37 PM1 comment

Having come through one of the more contentious annual budget deliberations of the last couple decades, at least, in the City of Falls Church, there are a number of unresolved questions that warrant further study over the next few months to inform the next budget cycle which, after all, will be on us sooner than we think.

Some clear headed thinking needs to go into the following matters:

Fund Balance. Despite the protestations to the contrary, there is no simple answer to the question of an appropriate size for the City’s fund balance. Our neighbors in Arlington and Fairfax have nowhere near the bloated fund balance level that City Hall considers essential for Falls Church. They average four to five percent of annual expenditures, while Falls Church officialdom insists on holding 17 percent of annual operating expenses, some $10 million, sitting in non-performing bank accounts doing nothing. Keeping all that money doing nothing makes no sense to anyone but Wall Street.

Surpluses. The City came up this year with a multi-million surplus from its current budget, this time around $2 million. Yet City Hall insists that this money cannot be used for the two things that matter the most in the crafting an annual budget: reducing the tax rate or funding essential services, such as the schools. This is because, we are told, surpluses are non-recurring and therefore to use them for operating costs will screw up future budgets. However, there are often extraordinary short term needs, and there is no reason why surplus money cannot be deployed to meeting them. Instead, surplus money gets rerouted to often contrived and superfluous ends known as “one time expenditures.”

Capital Improvement Projects. These are given as the need for maintaining an inordinately high fund balance. If the City is planning to borrow a lot of money for new buildings, then having a lot of money sitting in the bank will please Wall Street and could result in a lower interest rate. But we live in a very fluid time in terms of what defines capital improvements. Old “bricks and mortar” notions are being supplanted with new models, including public-private and other space sharing and saving ventures defined by the technological revolution. We need fresh thinking on this.

Storm Water Fund. This was rushed into while a plethora of budget distractions competed for Council attention. As designed, it will hurt mostly small minority owned businesses, like at the Eden Center. That’s not right.

Property Assessments. Another source of contention this budget cycle was the insistence by some that Falls Church property assessments were routinely far too low, and that assessments more in accord with reality would produce far greater revenue for the City. But the assessor’s office can show evidence of being in full compliance with standard practices. This calls for a thorough outside review, something which should be done as a matter of routine every five or six years.

  • Mike Smith

    While I disagree with pretty much everything in this editorial I do find myself amused by one aspect. The suggestion is that the fund balance should be used to lower taxes while at the same time the complaint is that assessments are too low – I believe that raising assessments results in…(wait for it)…higher taxes.

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