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Tightening the Purse Strings

County administrator predicts shortfall of $60.9 million at 89-cent tax rate in fiscal year 2008.

County Administrator Kirby Bowers presented the Board of Supervisors with an outline of the fiscal year 2008 budget if the tax rate were to stay at the current rate of 89 cents.

In the presentation, which took place Tuesday, Nov. 21, Bowers told the board that the estimated assessed value of a single-family home in 2007 would decrease by 3 percent. In 2006, the average home in the county was assessed at $526,111. In 2007, the number would drop to around $510,317, Bowers estimated.

Only a few months ago, in July, assessments were predicted to increase and create more than $35 million in additional revenue for the county. Todd Kaufman, the county's assessor, said the projected increase includes all classes of assessments, commercial and residential.

"When you look at everything together there will be a slight increase," he said.

While home values are expected to decrease, Bowers also predicted a 1.3 percent increase in commercial and industrial building, creating $7 million in tax revenue. New construction, 90 percent of which would be residential, would create $31 million for the county and the school system would gain an increase of $13.5 million from the state.

EVEN WITH THE decrease in estimated home values, however, Bowers told the board that there would be several important decisions to make about the next budget, including prioritizing budget requests from various county departments. Of the $53.3 million identified as budget enhancement requests, about $36.7 million comes from public-safety departments.

Bowers told the Supervisors he had identified minimum enhancement needs for county departments at $10.2 million, dropping the public safety requests by more than $30 million. The absolute needs do not include the county school system, however, which are expected to be an estimated $90.8 million.

At the current tax rate of 89 cents per $100 of assessed home value, Bowers predicted a $60.9 million shortfall in the budget, with a 3 percent decrease in the average tax bill. Bowers also said that a 92 cent tax rate would give the county an additional $29.1 million in revenue, while keeping residents' tax bills virtually the same as this year. A .965 cent tax rate would give the county an additional $72.7 million in revenue.

"A 2007 tax rate at .965 [cents] would close the shortfall that I am predicting today," he said.

IT WAS THE rising assessed values of homes in the county, sometimes in double-digit percentages, that increased the cost of living for residents. The increasing tax burden caused Supervisors to direct Bowers to create the 89-cent budget, but they chose to leave themselves the option of increasing the tax rate.

However, Supervisor Mick Staton (R-Sugarland Run), who originally asked Bowers to create the 89-cent rate budget, said Tuesday, that unless Bowers was given an instruction to prepare a budget at a higher rate, the existing budget would be advertised.

"This is right online with what we wanted," he said. "The question now is whether we raise the tax rate to meet the requests or we trim the requests."

Most Supervisors seemed to support the idea that they would have to trim the budget requests from county departments, with some indicating that they would like to keep the tax rate at 89 cents.

"I will vote for an 89 cents tax rate, but we need to figure out where the balance is," Supervisor Bruce E. Tulloch (R-Potomac) said.

Supervisors also declined to give Bowers any further direction, but Bowers said he would be willing to prepare budgets at higher tax rates.

"You tell me 89 cents and I'll do it," he said. "If you want more flexibility, I can do that."

The School Board will hear a budget presentation from the schools superintendent Nov. 28, and Bowers said he expects to make budget decisions throughout December.