School Budget Cut Remains on Table, Final Vote Monday

The Falls Church City Council stands on the brink of rejecting the recommendations of both its City Manager and School Board by seeking to avoid any increase in its real estate tax rate for the upcoming fiscal year budget. The Council will vote on a final version of its $70 million-plus FY 2008 budget, for the fiscal year beginning July 1, this Monday night.

Last month, City Manager Wyatt Shields recommended a budget with a single cent increase in the real estate tax rate, from $1.01 per $100 assessed valuation to $1.02. He was able to hold the rate increase to a single penny despite a School Board budget that required a modest increase, necessarily reacting to fierce regional competition for educational talent, and a dramatic drop-off in the growth of residential real estate values.

A penny on the tax rate produces $350,000 in revenue to the City, but it averages out for the average Falls Church homeowner to about $9 per month. Facing similar revenue downturns to Falls Church, other Northern Virginia jurisdictions are planning major increases, such as Loudoun County, which is set for a seven cent hike. At least three other area jurisdictions have tax rates already higher than Falls Church’s.

Yet the Council spent two hours Monday night anguishing over $20,000 and $40,000 items in an attempt to, officially, lower the rate by that one penny. In fact, with minor adjustments due to $50,000 in unexpected added revenue from the state and a decision to raise $40,000 with another five-cent increase in the cigarette tax, the Council was mulling only $260,000 in total cuts. No final decisions were made but the Council is slated to meet in another work session at City Hall tonight (Thursday) to reach a consensus.

In an unusual development, Mayor Robin Gardner called for tonight’s extra work session because she did not want the Council to be at odds going into Monday’s official meeting where the vote will be taken. That’s despite the fact that the Council has advertised a public hearing on the budget for Monday, implying that new information from that hearing could modify one or more of their members’ disposition toward the final vote.

At one point in the work session last Monday, the Council was overtly split between three, including Mayor Gardner, wanting to cut the penny recommended by Shields and approve a budget with no tax hike. Two others favored leaving the penny in, and two more stated they were decidedly undecided.

Councilman David Chavern, the one member of the Council who held out in support of the City Manager’s and School Board’s budgets, said, “We’ve received the best, most well thought out, smartest budget from the School Board.” He added, “I don’t want to second-guess them on the right contingencies they need.”

Mayor Gardner argued repeatedly that the School budget does not have a history of needing the $300,000 contingency it built into its budget this year, and that it should be cut by $100,000. However, the Council does not have any authority to dictate line items in the School Board budget, but can vote only on the total amount it will supply to the schools.

She pushed a resolution of taking from the contingencies of both the Schools and the City-side portions of the budget. However, the original plan for the smaller City-side contingency was to make some of it available for special requests of non-profit groups, including the Falls Church Education Foundation, a successful non-profit supporting the City schools.

A City grant to the FCEF was not included in its regular budget this year, and it was suggested that a grant could be subsequently provided by tapping the City’s contingency fund.

Chavern insisted the size of the contingencies is not the issue. “The (proposed) one-cent increase is for teacher salaries, plain and simple,” he said, noting that a surgical adjustment of the City’s pay scale to move entry level salaries up from the bottom of the regional competitive scale to its middle was praiseworthy.

Cutting the School budget, he said, “is not consistent with out relationship with the School Board,” adding that, concerning the tax rate, “no one seems ready to storm the barricades” (if there was an increase).

Council member Dan Maller called attention to the fact that many residences in Falls Church experienced a significant cut in assessed values, meaning that even with a one-cent rate hike would produce a net cut in their tax bill.

That means, he noted, that single family homes, which are more likely to have school-aged children “will take the burden (of an increase) for their children.”

Council member Hal Lippman said he’d become undecided by evaluating the history of the use of contingency funds, especially because, he said, of the “symbolic value” of avoiding a tax rate hike.