Editorial: Challenging Budgets

Editorial: Challenging Budgets

Local Government should be able to access income taxes to give relief on real estate taxes.

Northern Virginia governments are facing shortfalls in the classic budget sense: projected revenues are less than last year’s expenditures plus increases in costs.

Alexandria City Manager Rashad Young Young: "This is the seventh straight year of budgetary challenges, where the cost of current services and previous commitments exceeds our revenue growth." His proposed budget includes $190.6 million for Alexandria City Public Schools, a 2.62 percent increase over FY2014 but $2.5 million less than requested by the Alexandria School Board.

Fairfax County Chairman of the Board of Supervisors Sharon Bulova: "This will be a very challenging budget." Fairfax County Public Schools Superintendent Karen Garza proposed an increase of 5.7 percent, $98 million more than the schools requested last year, but supervisors have said to expect an increase of 2 percent.

Fairfax County, along with Arlington and Alexandria, is wrestling with how to fund increasing financial requests from schools, increasing needs for human services and providing a safety net, and many other areas of local budgets.

In Virginia, localities are allowed few areas of revenue, and local budgets are funded primarily through real estate property taxes. Property values have increased this year, and local governments are also considering increases in the property tax rate, meaning homeowners will pay more in taxes.

Fairfax County Real Estate Assessments increased 5.8 percent for single family homes, 8.4 percent for townhouses and 10.5 percent for condos. In Arlington, property values grew about 5.8 percent this year. That includes single-family houses and townhouses, which went up 6.2 percent, as well as condominiums, which went up 5.9 percent. In Alexandria, residential assessments increased 4.8 percent.

But just because a home is worth more this year than last year doesn’t actually put any more money in anyone’s pocket. The increases are mostly modest and necessary in an area that prides itself on providing an exceptional quality of life and thriving business environment.

Employment and jobs are also strong in Northern Virginia, with unemployment at 3.7 percent in Fairfax, 4.1 percent in Alexandria and 3.2 percent in Arlington. Northern Virginia is the economic engine of Virginia. The overall unemployment rate in Virginia is 5 percent, with these statistics from the Bureau of Labor Statistics. These rates are far below the national rate.

But state income tax, paid disproportionately by workers in Northern Virginia, are collected by the state for the state budget. The exact percentage of money that returns to Northern Virginia is debated, but it is definitely small. Localities should have the ability to add a piggyback tax to the state income tax in order to provide needed and expected services while giving relief to homeowners.

Anyone familiar with the political process in Virginia knows that this is a pipe dream with essentially zero chance. It would have to pass the Virginia General Assembly. Nevertheless, it makes no sense for Northern Virginia to pay income taxes to the state without being able to benefit.

Meanwhile, Arlington FY 2015 tax rate public hearing is March 27 at 7 p.m. More on Arlington’s budget: http://countyboard.arlingtonva.us/budget/

Fairfax County’s public hearings, all in the board auditorium at the government center: Effective Tax Rate Hearing 3 p.m., April 8, 2014; Budget Public Hearing 6 p.m., April 8; 3 p.m., April 9; 3 p.m., April 10. More on Fairfax County Budget, http://www.fairfaxcounty.gov/dmb/

For more on Alexandria’s budget https://www.alexandriava.gov/budget/info/default.aspx?id=75641.

A favorite guideline on testimony at budget hearings comes in Arlington: "Repetitious testimony is discouraged." Good luck with that.