In our observations of the Falls Church City Council’s deliberations on the most extraordinary budget in the City’s 60-year history, two critical components have been absent from the discussions.
As a result, Vice Mayor Hal Lippman was right at this Monday’s work session when he said there is an inappropriate atmosphere of “business as usual.” As the Council considers the special requests of various departments of the City, it’s focused solely on the spending, rather than income side of the ledger. The missing components are these: 1. the implications of the current negative growth trend for the next five years, and 2. an assessment of the ability of the citizenry to handle even the current tax rate, much less a rate hike, in these extraordinarily tough economic times.
1. Negative growth. This budget represents, for the first time ever in the City’s history, a figure lower, in absolute terms, than last year’s. This is not “zero growth,” this is negative growth. Yet in a presentation to the Council by F.C.’s Chief Financial Officer John Tuohy comparing hypothetical revenue and spending scenarios for the next five years, his “worst case” scenario was “zero growth,” and his optimal one was an annual growth of three percent. Granted, the “zero growth” scenario was scary enough, based on the Council’s existing wish list for capital improvements over that span. Real estate and other tax rates paid by individual citizens and local businesses would have to go through the roof for the Council’s goals to be met in a “zero growth” environment. But the reality could be far worse, in fact. It could be a continuation of negative growth, at least for a couple more years and maybe more, as some very credible economists are predicting. Maybe a chart showing the implications of a continued trend of the current negative growth vector would introduce the needed shock to startle the Council into reality.
2. What can taxpayers bear? The Council has been focused solely on the issues of belt tightening for City and school employees and programs, but no one has raised a word about the impact on the tight household budgets of the City’s 11,400 residents trying to meet their tax obligations, much less their mortgages or other basic needs. The discussion of the potential tax rate, possibly upping it two to four cents, has been completely devoid of a sober assessment of the City population’s ability to pay. This is tragic.
The Council has not embraced reality yet. If it were to do so, it would be compelled to take a tougher approach to establishing priorities. What can’t be sacrificed are the engines of the City’s revenue-generating capacity: its school system, buoying property values, and economic development, including marketing (i.e. Watch Night) initiatives. Everything else must be subordinated for now.