Local Commentary

Editorial: Don

Going into its stretch run forward final approval of a budget for the coming fiscal year, the Falls Church City Council is angling toward loping off a penny of the real estate tax rate recommended by City Manager Wyatt Shields. Last month, Shields proposed adding a penny to the current rate of $1.01 per $100 of assessed value to make up for the well-document steep drop in residential real estate assessment growth during the past year.

Shaving that penny (actually representing about $300,000) is ill-advised and counter-productive for the future of the City.

First of all, on the City government side of the ledger, some added savings would be achieved by financing the purchase of some needed new police and other vehicles, rather than buying them outright. That is hardly sound fiscal policy, adding to the City’s interest paying obligations over the longer term. But on the other side, the School Board is already engaged in a full-court press to avoid a slip in the reputation and performance of the school system in a regional environment marked by furious competition for quality.

Were such a slip to become widely known, the City would suffer a precipitous drop in the value of its residential real estate. Realtors concur that the current reputation of the Falls Church schools account for about a 15% value-added on homes here compared to surrounding areas. The City has come to rely heavily on that for the revenue it takes from real estate taxes. So, if you chisel the schools out of a relatively small sum now, it will cost the City far, far more down the road.

Frankly, cutting a penny on the tax rate is a cosmetic matter, designed to make politicians look good. In dollar impact terms, it is minimal for the average homeowner. In this case, the profiles of politicians should not outweigh the long term interests of the City, including of its school-aged children. On the contrary, it is the Council’s job to tell the public that it’s willing to take the heat, if necessary, to do what’s right.

In fact, if it were up to us, we’d not only keep the penny Shields has recommended, but we’d add one more penny for matters he did not address. Half that penny would go to offset a drop in the City’s Business License (BPOL) tax, which now is the highest in the region. With new commercial development being encouraged, it is completely contradictory for the City to keep such a high tax. It adds up to millions for any modest to mid-sized company considering moving to Falls Church, and therefore is a severe disincentive.

The other half would go to fund a marketing effort by the City. In the one area where the City is most inexperienced, marketing is the key to easing the burden on existing taxpayers by bringing new tax revenue through diversification, and that needs money and a longer-term view.