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Schools Face Cuts

It looks like the School Board may have to cut another $10 million from an already trimmed budget.

“This board cut almost $10 million to show our determination to cut the fat from the budget, and to make further cuts would go into muscle and bone,” said school board member John Andrews (Broad Run) at the Feb. 12 school board meeting, reiterating previous comments from school board member Thomas Reed (At Large). “Now is not the time to take a step backwards.”

County Administrator Kirby Bowers proposed $552.9 million to cover the school district’s operating expenses, capital projects and debt service, allotting the remainder of the $875.3 million budget for county expenses. Bowers proposed local tax funding at $260.6 million, $10 million less than the school district requested. The funding shows a $55 million, or a 22 percent, increase from fiscal year 2002.

“The board has committed to funding the School Board’s requests, so the schools are built when they are needed. They haven’t departed from that,” Bowers said.

Last month, the School Board cut $9.3 million from the operating budget, weighing the majority of cuts on a proposed cost-of-living increase reduced from 3 to 2 percent. The final budget the School Board proposed for fiscal year 2003 is $355.7 million, compared to a $291.7 million budget in 2002. The budget increase focuses on additional expenses to operate five new schools and the proposed salary increase.

“Growth accounts for most of the budget increase,” said Wayde Byard, school press officer. “It’s Dr. [Edgar] Hatrick’s position we cut what we already can cut.”

The School Board has not considered where to make additional cuts if the Board of Supervisors approves the proposed budget Bowers presented on Feb. 4, Byard said.

School Board chairman Joseph Vogric said some of the cuts would have to come from personnel costs, which constitutes 80 percent of the budget.

“I was a little surprised [Bowers] decided to take $10 million out of the budget without any indication of how that would be accomplished,” Vogric said. “It’s going to hurt the school system to take that drastic of a cut.”

SEVENTY-FIVE PERCENT of the district’s funding, as proposed, would be transferred from the general fund, compared to 72.5 percent in fiscal year 2002. The state’s portion for school fund revenue is expected to be $77 million and federal funding at $1.5 million, with the remaining funding coming from local funding and other financing sources.

The general fund is proposed at $501.8 million and includes revenue from property taxes, federal and state aid, and other county taxes and sources of funding. State funding will provide 13 percent, or $65.5 million, of the fund, a $12.7 million increase from a year ago but less than the county expected. Another 66 percent will come from real and personal property taxes. The local revenue for fiscal year 2003 is proposed at $432.3 million, compared to $404.8 million a year earlier.

Bowers said the county does not expect to see increases in state aid during the next two years. State aid includes a reimbursement from state property taxes, a motor vehicle sales and uses taxes, and taxes on deeds, wines and other sources. The county receives a return of five-to-one for state income taxes county residents send to Richmond. This year, the county’s return is expected to be $48.3 million, compared to $33.4 million the previous year.

Bowers said the county supports an increase in revenue sharing from the state, instead of relying on property taxes at the local level.

“We’re clearly sending much more to Richmond than we get back,” Bowers said. “There’s a tremendous difference in what Loudoun County sends to the state and what we get in return. In essence, we’re subsidizing other parts of the state.”

THE COUNTY’S HIGH rate of growth, a lack of state support and an antiquated tax structure are reflected in the property tax bills, Bowers said. The tax structure is based on a 1950s manufacturing economy with large plants staffed by a small number of employees. Under that system, the county could impose real property taxes on a larger land base.

Instead, several businesses have larger staffs and help generate the county’s tax revenue from the employees’ income tax returns and not through real property taxes. “The tax structure has to match with the way the economy works in 2002, not a 1950's economy,” Bowers said.

The tax rate is proposed at $1.08, the same as last year. However, assessed values increased 17.4 percent, meaning a larger tax bill for residents.

“What’s happening if you have a state government that is not taking responsibility to fund the local level,” Bowers said. “We have few alternative revenue raising options outside of real property taxes for homeowners. The costs are being shifted to the average homeowner’s tax bill.”

Bowers said the county needs an increase in state funding and more flexibility to raise funds using other alternatives. Bowers called the property tax a “one-size-fits-all format.”

The budget picture Bowers presented to the Board of Supervisors includes a tax rate of $1.12 to fund the entire budget, along with a second option of $1 if the board supported making additional cuts in county and school funds.

Hatrick, superintendent of schools, said he was disappointed with Bower’s proposal, but was glad he included a tax rate to fund the entire budget. “I am confident the school board and citizens of Loudoun County will be able to make a case to the board for full funding,” he said, adding that full funding is critical to maintain teacher salary competitiveness, retain class size and continue the program initiatives the school board has started in the past two years. “It’s what the citizens of the county want, and I know it’s what we can afford. I think the Board of Supervisors will be willing listeners. They just need to hear from the public.”

“We’ll have to do what we have to do,” said School Board member Geary Higgins (Catoctin), who also said he was disappointed with the proposed budget.

A joint county and School Board meeting is scheduled Feb. 28 for budget discussions.