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Shields Projects 6 Cent Tax Rate Hike In Spring to Pay for School & More

KIRAN BAWA, F.C.’s new chief financial officer, presented to the City Council cheery fourth quarter numbers for the City’s fiscal year that ended June 30. (Photo: News-Press).

It was earlier coming than usual this fall, but Falls Church City Manager Wyatt Shields told the F.C. City Council Monday night that, despite solid fourth quarter numbers for the City’s operations, a six cent real estate tax rate increase will most likely be required to, assuming the $120 million school bond referendum passes in November, pay for the new construction of George Mason High, the Mary Riley Styles Public Library and a renovated City Hall.

According to the number crunching of new F.C. Chief Financial Officer Kiran Bawa, even with good numbers ending the fiscal year on June 30 and very tight budgeting going forward, the six-cent bite will be required, but will draw back to four cents after four years since the plan for the new high school would be to “front load” the borrowing.

But this is almost six months before this discussion gets serious for the next fiscal year’s budget, and Council members Phil Duncan and Dan Sze were among those who said that “there will be impassioned debate” on the Council over such matters as the City’s fund balance policy, for example, going forward.

Still, given the recovery in fourth quarter revenue numbers reported last night, “We’re in good shape to take on major obligations,” Duncan said.
Vice Mayor Marybeth Connelly cited the improving numbers for the City’s meals tax, personal property tax and gross revenue tax numbers, all sharply up, as evidence that the City’s future remains bright.

Sales taxes were up 9.6 percent, meals taxes up 8.8 percent, gross receipts (BPOL) taxes up 4 percent and personal property taxes up 10 percent, with 500 more cars now in the City than a year ago, according Bawa’s report. The results of the quarter produced a surplus of $496,000 for the City coffers that was assigned to the “undesignated fund balance” for the time being.

Shields said his projection of a six cent tax rate increase that would kick in next summer if adopted next April is predicated on holding the line of the operational costs for the City and its schools at not greater than the projected rate of revenue growth, which is expected to be around three percent.

He announced that at the outset of the Council’s Oct. 18 meeting will be a walking tour of the proposed new Broad and Washington mixed use project, followed by tours of the recently completed and occupied Lincoln at Tinner Hill and 301 W. Broad projects. To date, with both projects already nearing capacity, they have averaged only one school-age student per 10 apartment units, Shields said.