Targeting the Tax Bill

Targeting the Tax Bill

City Council sets a budget target that would lower the average residential tax bill by 1.9 percent.

After years of expanding budgets, City Council members decided to tighten their belts on Tuesday night. In a unanimous vote, council members supported a budget target that would constrain the general fund budget to $353.4 million — a 1.6-percent increase over last year’s budget. The schools would be held to a $155.5 million budget, a 3.8-percent growth target that would give the division about $5.5 million more than it received last year. Together, the city and schools would increase 2.3 percent — a scenario that budget officials say would lead to a 1.9-percent decrease in the average residential real-estate tax bill.

“We’re going to have to dig really deep,” said Mayor Bill Euille. “Nothing is going to be untouched.”

After five years of extraordinary growth in the real-estate market, city leaders have become accustomed to rapidly growing revenue streams. In the same period of time, the average tax bill has doubled. Tuesday’s vote on the 2.3-percent target growth rate was a response to criticism of spending habits at City Hall. Yet Vice Mayor Andrew Macdonald warned that the City Council might not be able to reach the difficult target.

“I think people can look at this target and see that we are working hard,” Macdonald said. “But we may not be able to go that low.”

CITY OFFICIALS anticipate a 3-percent increase in revenues this year — a decline from the past few years of rising real-estate tax bills. Last year, for example, the city’s revenues increased 10 percent. Councilwoman Del Pepper said that although the City Council was taking a responsible step by enacting a 2.3-percent growth target, events may conspire against the possibility.

“This target would keep the tax rate where it is now,” Pepper said. “But I just want everybody to know that it is possible to increase that amount.”

Councilman Tim Lovain, a former chairman of the city’s budget-advisory committee who campaigned on bringing more fiscal restraint to city government, praised the move. Calling the 2.3-percent target a “bracing discipline,” Lovain said that the vote was “good news for property tax payers.”

“We’ve been through some salad days,” Lovain said. “This budget target will impose a sort of bracing discipline.”

APPLAUSE FILLED the council’s chamber at City Hall Tuesday night after the vote. Ernie Lehmann, vice president of the North Old Town Independent Citizens Civic Association, rose to his feet and cheered the austere budget target. After the meeting was over, he praised the City Council members for making a difficult decision.

“They took a hard position,” Lehmann said. “They faced reality head on, and that’s what we expect our elected leaders to do.”

Tom Parry, an Alexandria resident concerned with rising tax bills, also applauded the decision. He witnessed the vote from the second row of the chamber and later praised the vote as a triumph of responsible budgeting.

“I heartily congratulate Councilmen Krupicka, Smedberg and Lovain for taking the lead in advocating for a budget target that does not increase the real property tax rate,” Parry said. “Their success will serve the city well in this era of constrained revenues.”