Shields Presents 2 Options to the F.C. Council to Lower a Proposed Tax Rate Hike

April 10, 2014 9:28 PM8 comments
CHIEF FINANCIAL OFFICERS for the City of Falls Church, Richard LaCondre (left) and Hunter Kimble (right) took on the City Council's concerns for finding ways to lower the proposed tax rate increase tonight. (Photo: News-Press)

CHIEF FINANCIAL OFFICERS for the City of Falls Church, Richard LaCondre (left) and Hunter Kimble (right) took on the City Council’s concerns for finding ways to lower the proposed tax rate increase tonight. (Photo: News-Press)

Falls Church City Manager Wyatt Shields presented two options for lowering the projected tax rate increase in his recommended budget Thursday night, as he’d been requested to do by the Council on Monday. One option would drop the tax rate by 2.6 cents, and the other by the 4.5 cents such that the rate would remain the same as last year’s at $1.305. In both cases, further reductions in the proposed City operating and school budgets would be included, $238,000 from the general government and $400,000 from public education.

With two key members of the Council not present for the work session Thursday, Vice Mayor David Snyder and former Mayor Nader Baroukh, Mayor David Tarter determined that after a lengthy discussion by those present that no move toward a final choice of options be made at that meeting. There is time before the Council must formally adopt its FY15 budget on April 28.

Neither of the options makes use of unassigned fund balance for the combination of new revenues and cuts. The second option includes all the components of Option 1 but uses surpluses from the current fiscal year, assigned temporarily to the fund balance but which would be used for one time or capital projects otherwise, to come up with $680,300 of the $1,600,000 million needed to keep the tax rate the same as this year. The rest of the $1.6 million comes from $282,000 in debt service savings found in a new scrub of the numbers and the $638,000 in cuts to the operating and school budgets.

Even if kept at $1.305 (per $100 of assessed valuation for real estate), most City residents will see their tax bills higher when they arrive in May, first because of a hefty boost in assessed values and second because of the first-time annual stormwater fee that will vary widely from property to property based on levels of impervious surfaces.

  • Mike Smith

    While it is good to see some thought being given to holding the line on the tax rate, one part bothers me. How can you “scrub” debt service to come up with over $200,000 in savings? I thought that once you borrowed the money the repayment schedule was set. Sounds like the “scrub” was really an “oops.”

  • James E Schoenberger

    Let’s hope the City Council has the good sense to reduce the tax rate rather than keeping it the same despite the huge assessment increase and the ill-designed stormwater fees.

    However, the school population is projected to increase 172 students next year to a total of 2,593. What’s more alarming is that the school administration projects the
    number of students four years later will be 3,247. If you dislike what’s happening to your taxes this year, think about what that will do to your taxes four years from now.

    I recently proposed (and listed on this website) eleven ideas to the City Manager and the Council to dampen the school population growth rate, many of which were aimed at the free ride given to redeveloped or new single-family housing. Unless something like those ideas comes to fruition, Falls Church citizens are about to
    experience a serious meltdown in their disposable income.

    Remember this as you contemplate the issue. A resident of Falls Church with a home valued at $500,000 currently pays over $1,400 more in taxes than an Arlington County homeowner with the same value home. That may not sound like much but over ten years, that’s $14,000 more in the Arlington owner’s pocket. Double all those numbers for a $1 million home and, remember, it’s going to get worse.

    City Council members who make statements that the City should “not cut either City or the schools’ budget requests” obviously have no idea what sort of long-term problem they are foisting upon city taxpayers. Clearly, Rome is burning while the emperor fiddles.

    • FallsChurchCitizen

      My one question: if the same $700,000 Falls Church City home were hypothetically picked up and placed on a same-sized lot in Arlington or Fairfax County, would it also have a market value of $700,000? Put another way, do Falls Church City homeowners enjoy a market premium over similar homes in neighboring jurisdictions? If so, then a discussion of what Falls Church City taxpayers must pay should probably be balanced with what they get in return when they cash out.
      Looking at the City’s slides, it seems to me that the people who should really be irritated are residents of places like Vienna, Herndon, Leesburg and Manassas, all of whom must wonder why they’re paying the same or even higher tax rates than tiny Falls Church. The comparison to much larger counties seems less appropriate, given the disparity in economies of scale.

      • JFallsChurch

        Fairfax – depending where but more than likely drop in price
        Arlington – depends again..if N. Arlington, price might be very close to the $700K

        • FallsChurchCitizen

          Thanks. It occurs to me that there’s actually an existing data set on this. If you go to the eastern edge of the city, you see that Tuckahoe and Sycamore streets are bi-sected by the Arlington / Falls Church line. So there you have homes on the same street with similar plots of land, with the only difference being the Arlington homes are a marginally closer walk to the EFC Metro station. I guess you could see what similar homes on those streets are priced at.

          • sueFC

            Also on Great Falls (or any of the streets off West) that turn into Fairfax. Those houses feed into sought after schools so are a good comparison (from what I can see in the listings, FCC houses sell higher) – older stock on the FFX side goes for under $400/sq ft; on FCC side it is $450 or even $500 sq/ft. If you look at the houses bordering Fairfax on the Timber Lane side of things, it is a staggering difference (in the $200s per sq/ft). (Not scientific – I just looked at a map view on Redfin of sales records and clicked on houses).

      • jimbledsoe

        It’s not the tax rate, it’s the tax bill. Inflated home values and increased tax rates equals higher taxes. This city wants it both ways and is the reason folks get irritated. Who cares what $700,000 will buy you in Arlington, unless you plan to move. Folks can rationalize it any way they want and I suppose there are some that wonder if they paid too much. The slides Mr. Shields shows every year are presented for a reason and are obviously effective. What a specific home will sell for at any point in time has more to do with the home and the investment made in the home at the point of sale, than our perceived market premium in my opinion.

        • FallsChurchCitizen

          The City is about to build 1,000 new apartments, so those that like living in Falls Church but who don’t believe they should pay property taxes anymore can sell their homes at inflated prices and move into one of the new townhouse at Northgate or wait a couple of years for the apartments over Harris Teeter.

          I think Sue’s point is that similar homes in pretty much the SAME condition sell for more — even on the same street — on the Falls Church side of the City line. Others can opine as to why people would willingly pay a higher price for the right to pay even higher taxes on the same street.

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