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How about $2.455 Billion?

School needs, state cutbacks squeeze budget.

Those who lead and manage Fairfax County say the budget for next year is caught in a double bind, squeezed between a precipitous drop in revenue from the State of Virginia and the rising cost of running public schools that serve a diverse population.

The county expects a $13 million drop in revenue from the sales tax and interest on its investments, Fairfax County Executive Tony Griffin said.

At the same time, market conditions have caused a spike in home values, good news for homeowners, Griffin said. But with houses worth more on the real estate market, tax assessments rise, and tax bills go up.

Residential real estate values — based on the prices homeowners get when they sell their houses — have increased by 16.27 percent, Griffin told the Board of Supervisors Monday.

In the next fiscal year, real estate assessments, which determine the amount of a homeowner’s tax bill, are likely to rise by an average of 15 percent, Griffin said.

The actual tax rate — $1.23 on every $100 of value — won’t change, but many homeowners this week will receive tax bills that come as a shock. The typical household will pay $470 more in real estate taxes than last year, Griffin said.

“Obviously, the real estate tax base is the big story in terms of this budget,” Griffin said, blaming the “continued lack of diversification” among its sources of revenue for the county’s continued dependence on residential property taxes.

Real estate taxes will provide 57.4 percent of the county’s total revenue next year. “Only three years ago, it was about 50 percent,” Griffin said. The assessment on his own house in Oak Hill has risen by 24 percent, Griffin said.

Commercial real estate in Fairfax County increased .52 percent, the smallest increase since 1996, Griffin said.

TAX NOTICES were mailed to 311,580 taxpayers on Feb. 25, the same day Griffin presented the Board of Supervisors with a $2.46 budget that is designed to “stay the course.”

That number represents 95 percent of 327,760 taxable parcels in the county that changed in value, according to Fairfax County officials. The other five percent have no change in value.

Conversely, the largest category of commercial real estate — office buildings with elevators — declined in value by 2.48 percent. Hotels, impacted by a drop in tourism following the Sept. 11 terrorist attacks, showed a decrease of 15.39 percent, Griffin said.

Despite paying more, taxpayers won’t see any new programs or services, Griffin said. County officials will be hard-pressed to continue what they already have.

The effects of last year’s recession will gradually improve, Griffin said, predicting a “weak economic rebound.” But he already predicts a budget for FY 2004 that will continue to be flat.

Griffin asked the board to approve 50 new jobs to staff new facilities or completed expansions.

In the third quarter of the current budget, county agencies have saved $17-$18 million in answer to Griffin’s request that they reduce spending by five percent. But that money is a one-time savings, not a change to the base line of the budget, he said.

PUBLIC SCHOOLS asked for a “transfer” of $1.22 billion for school operations, an increase of $138 million or 12.8 percent, Griffin said.

To fully meet the FCPS request, Griffin said, the county would have to raise real estate taxes by five cents per $100 value.

Consistent with the board’s budget guidelines, Griffin proposed a FY 2003 budget increase for schools of $76.3 million, or seven percent.

The public schools get most of their funding from Fairfax County government; 51.6 percent of the county spending goes to schools.

Of this year’s $61.7 million gap between the schools’ request and what the county says it will provide, Griffin said, all but $15 million is due to the shortfall of funding from the state.

Facing revenue shortfalls of its own, the State of Virginia is expected to curtail its contributions to FCPS by about $46 million.