City Leaders Strive for Budget Consensus
By GEORGE BROMLEY
Falls Church Times Staff
On Monday night members of the Falls Church City Council and School Board listened to a sobering presentation on the development of the FY 2011 budget. Already contending with a projected shortfall of $7.5 million, the officials were in a cooperative mood.
No hard decisions were made, but members of both bodies clearly recognized the gravity of the situation and refrained from posturing.
Chief Financial Officer John Tuohy painted a bleak picture, noting that the deficit could go higher “if everything works against us.” In that case, the shortfall could rise as much as $3 million.
Potential unknowns include actions by the General Assembly, especially regarding revisions to the Virginia Retirement System next spring, rising health insurance and energy costs, actions of the federal, state and other local governments, and the outcome of the Fairfax County Water Authority’s suit against the City.
Covering the projected deficit is certain to require some level of tax increase, though some of the rise could be reduced through cuts in expenditures. Each one cent increase in the tax rate equals $300,000 in revenue. If expenditures were to remain level, the rate would have to be increased 25 cents to offset the deficit, assuming a fully funded debt service. The current tax rate is $1.07 for $100 of assessed value.
Because no Council member is likely to support such a sizeable increase in the real estate tax, and because other fees and taxes considered so far would not substantially trim the deficit, spending cuts are also a given.
Mr. Tuohy advised that citizens have made suggestions for dealing with the City’s financial situation and that some of them have been quite insightful. Additional comments are welcome at budget@fallschurchva.gov.
Two town hall meetings are tentatively scheduled for mid-February but may be moved up to allow receipt of public input earlier in the budget process.
Video of Monday’s budget meeting should be available at the City website later this week.
By George Bromley
December 1, 2009
George:
Thanks for the information. Did CFO Tuohy indicate what he meant by”if everything works against us”? An additional $3 million shortfall, if it were covered by residential taxes, would require an additional 10 cents to the tax rate.
While it is unlikely that “everything” will work against the City, however, it sounds like prudent planning would require an assumption of additional shortfalls.
Ira
The “everything” line was mainly the elimination of the $2.4 million transfer from the Water Fund, which would be required if the Virginia Supreme Court were to rule this part of our City Charter unconstitutional.