The recommended Fiscal Year 2019 budget submitted to the Falls Church City Council Monday night by City Manager Wyatt Shields actually comes in a half-cent less on its real estate tax rate component than predicted last fall. In early December, when the Council first set parameters for this budget cycle, it factored in the predicted four-cent rate hike owing to the debt service on bonds to construct a new high school that voters OKed in November, and proposed that another two cents would be needed to fund organic growth in the school and city operating budgets.
But with the organic growth surpassing 3.4 percent, even with pessimistic forecasting about the City’s obligations to help fund Metro and with the School Board forwarding a budget request with a 2.8-percent increase (above the 2.0 the Council told them to ask for), Shields presented a new budget of $93.964 million, up from the current fiscal year’s $87.366 million, with a net growth of $6.598 million.
Should, in the next couple months, the Richmond state legislature come up with a funding formula for Metro that would relieve the burden on the City (as it is, Shields went with a “worst case scenario” in his projections that increases the City’s obligation from $954,000 this year to $2,305,000 the next), then the need for the 5.5 cents could be less, after all. That remains to be seen as the City Council now begins its budget deliberations that will culminate in late April.
But as its stands now with Shields’ projections, the average residential home in the City (the average being valued at $676,900) will see taxes go up this year by $634 to over $9,000 annually, even as the budget calls for beefing up the City’s tax relief programs for the elderly and disabled. That hike is due to a combination of a rate hike and an average 2.85-percent increase in assessed property valuations. At a 5.5-cent rate increase, the City’s real estate tax rate would climb to $1.385 per $100 assessed valuation.
The main clash that came from the Council in the wake of Shields’ recommendation, which included the Schools’ 2.8 percent request, came with Councilman Phil Duncan squaring off with Vice Chair Marybeth Connelly. Duncan said the “elephant in the room” was the fact that the Schools violated the guidance they were given in December to hold their operations budget to two percent, going for 2.8 percent instead. Connelly said the guidance given was in the context of other guidance, as well, such as the call to “maintain excellent services and schools,” which competed with the 2 percent guidance.
School Board chair Lawrence Webb, who presented the rationale for the School Board budget request, said he was also puzzled by the Dec. 11 guidance, because it was only Duncan was stipulated 2 percent, and others stipulated 3 percent.
Two spokesmen for the School Board request, Laura Downs representing the City’s three PTAs, and Bill Kelly of the Falls Church Education Association, made compelling cases for the 2.8 percent number, citing core needs of the schools and the fact that the 2.8 percent request was the lowest in many years.
Connelly reminded the Council that the citizens of Falls Church came to the polls last November to deliver the highest voter turnout in the entire commonwealth, and voted in favor of issuing a $120 million bond for a new high school by a 64-to-36 percent margin, knowing the implications for taxes. The Schools, she said, did a commendable job holding their budget request to less than the organic (3.4 percent) growth in annual revenues and should be applauded for that.