The Herndon mayor and Town Council adopted the fiscal year 2005 budget Tuesday night, but failed to approve a way to fund it.
An attempt to lower the proposed tax rate from 28 cents per $100 assessed value by a penny mounted by Council members Dennis Husch and Connie Hutchinson failed to get support. As did a motion to leave the tax rate at its current level. The ordinance governing the levying of taxes must pass by a two-thirds majority rather than a simple majority, which left the motion to maintain the tax rate one yes short with a 4-2 vote, with Husch and Hutchinson opposed. Councilman John De Noyer was absent from the meeting because of medical reasons.
Even without an approved real estate tax, the council approved the proposed $34 million budget — $27 million of which is for the general fund — with amendments. It then deferred the vote on the appropriation of fund to implement the budget since no tax rate was in place. The taxes and appropriation ordinances will come before the council again May 25.
"I don't know how we can appropriate funds until we settle the matter of the tax rate," said Councilman Harlon Reece as he made the motion to defer.
ONCE AGAIN, the public hearing drew little comment from residents. Seven people spoke, with only one asking for the tax rate to be lowered. John Davis said that the higher property assessments amounted to a tax increase. The assessments, he said, have increased faster than the cost of living.
"Please ... reduce the tax rate 2 cents," Davis said.
Husch instead recommended reducing the rate by a penny, saying the town has reduced the tax rate a total of 4 cents in four years. He also commended the town staff for incentives it has taken to hold down costs, such as phasing out the cost-of-living increase. But even in recommending the reduction, he urged caution.
"By reducing the rate by 1 cent, $277,000 for every 1 cent of the tax rate will not be collected by the town. We have to be careful when we adjust the tax rate. It has a short-term affect, as well as a long-term affect," Husch said, pointing out the reduced revenue means it will take longer to complete capital improvement projects or harder to provide services at their current level.
Other council members, however, felt the 1-cent reduction was of negligible benefit to homeowners, while creating a financial pinch for the town.
"I started out saying I would like to find 2 cents in the budget. I couldn't find it," Councilwoman Carol Bruce said. "Knocking out $280,000 from the budget, 1 cent for something symbolic, does more harm than good."
The 1-cent reduction would equate to approximately $25 per year for the average household.
WHILE THE COUNCIL could not come to terms on a tax rate, it did approve the budget by a 5-1 margin, with Husch the lone dissenter.
A number of amendments were made to the fiscal document, however. A $1,500 grant to the Herndon High band, a $1,500 grant to the Herndon Middle school band and a $1,000 grant for the high school's after-prom party were reinstated. The grant for the Herndon Dulles Chamber of Commerce Visitors Center was reduced to $40,000, with the possibility of the council reassessing the amount midyear. The center was requesting $70,000, while the town manger suggested $58,000.
The council also agreed to push up the funding for the final phase of the community center renovations to fiscal year 2005 by borrowing $3.2 million for the water and sewer enterprise fund, on the condition it be repaid.
Hutchinson, as an employee of the chamber did not vote on the Visitors Center grant request and Mayor Rick Thoesen was opposed to the motion. Husch opposed borrowing the money for the community center on what he said was philosophical grounds. The school grants passed unanimously.