Vienna’s budget review process has begun after town staff last week released their recommendation for fiscal year 2008, a proposal that is characterized by a recent stagnation of the residential real estate market and a need to reclassify staff salaries and benefit funds to match up with local competition.
As a result, the Town of Vienna’s proposed budget includes a more than three percent increase in total spending and a rise in the real estate tax rate that could possibly reach as high as eight percent, according to the proposed budget and town staff.
"The budget is for us, like it is for anyone else, gas is going up, the prices of a lot of things are going up right now," said town manager John Schoeberlein, who described the budget as "lean" as possible given the need for increases. "Our costs are going up and we’ve attempted to keep our costs as low as possible … but this is the cost of business."
In his letter summarizing the budget, Schoeberlein notes the decline of more than a half of a percent of average local residential real estate assessments and further limitations of state funds. That, paired with a need to increase town staff salaries and benefits as well as providing increased town programming and greater access to local property tax relief, are the reasons for the increase in the real estate tax rate.
During that same time, average business real estate assessments grew more than 10 percent, placing an increased amount of the tax burden incurred by residents on the shoulders of local commercial property owners, town documents show.
THE TOWN COUNCIL is also reviewing the possibility of eliminating its vehicle decal requirement along with its extra level of administration demands and personal hassle for residents, according to Schoeberlein. If approved, the town would then increase the real estate property tax rate by about three-quarters of a cent to make up for the lost revenue, he added.
Fairfax County eliminated its vehicle decal requirement two years ago.
The idea came from residents who have expressed to council members frustration with the need to apply for and pick up the decals, according to council member Edythe Kelleher.
"Decals are a pain in the neck and what we’re seeing is that people don’t want to deal with that," Kelleher said. "There has been significant expression to us … that residents would rather handle it directly in one bill."
The increase in property tax would also be deductible from annual income tax, where decals are not typically deducted, Schoeberlein noted. Approximately 13,000 vehicle decals, which are required on town vehicles under local law, are sold every year to residents, according to town staff. They cost between $20 and $25, based on the size of the vehicle being registered.
After the possibility of eliminating the decals was brought to light during last weekend’s comprehensive budget work session, the tax rate was tentatively adjusted from its original requested increase of just under a penny to a little more than a penny and a half to 20.22 cents, according to Schoeberlein.
If approved at that rate, the average Vienna homeowner would pay a little more than $75 in property taxes to the town than in the previous year, according to town figures.
THE NECESSITY for the rare increase in tax rate is primarily the result of a need to make employment with the Town of Vienna more attractive to potential recruits by raising base salaries, particularly for law enforcement personnel, where hiring has been difficult in recent years, according to Schoeberlein.
More than $750,000 of the approximate total increase of $1.2 million is due to the proposed increases in staff salaries and benefits.
The need to raise salaries and benefits for staff came after an independent study was conducted on behalf of the town and presented to elected officials in February of this year, according to Mayor M. Jane Seeman. The study found that in order to maintain competition for quality employees in a tight local job market, salaries and benefits of employees would need to be reclassified, she said.
"Fairfax, Manassas, Arlington, we all sort of tussle for the same employees, and we needed to bring ourselves up to parity with their salaries," said Nancy McMahon, human resources director for Vienna. "It’s not like there is a huge pool of applicants out there, it’s very competitive … so if we want to maintain and recruit a solid staff we need to have the necessary means to attract them and keep them here."
While tax rates and spending have increased in this proposed budget for the coming fiscal year, Seeman said that they would be accepted as necessary by Vienna’s residents.
"I think people feel that if they’re getting their money’s worth and they see where their tax money is going that they are happy," she said. "We’ve always been very transparent and open with the town … and we are looking forward to hearing what the public has to say" about the proposed budget.
The town’s fiscal year 2008 budget will be amended and approved by the town council before the end of June, when it is due to go into effect. A series of public hearings and work sessions open to the public will be held during its drafting process.