Fairfax County has not waited to act on the fiscal impact of the steep downturn in the housing market, given that residential real estate taxes account for 60% of its annual operating budget. According to Chairman Gerry Connolly, an across-the-board 2% cut in all county agencies has already been implemented in the current fiscal year, and another 2% cut is planned for the next one, along with an effective hiring freeze and no growth in the school budget.
Falls Church should take some cues. The City Council’s reaction to the news reported on the front page of this paper last week of a projected $650,000 shortfall next spring was one of defensiveness and denial at its work session Monday. It incorrectly read into the report an attack on City Hall staff and felt its main duty in “setting the record straight” was to make pronouncements of full confidence in those administrators. (Since deciding in the last couple months to video tape work sessions for later broadcast on the City’s local cable channel, there has been a lot more “speechifying” at those sessions).
Council members brushed off the shortfall as something that the staff would handle without any real problems and also defended their vote to expend $240,000 on City Hall improvements on grounds that money came from a designated “fund balance” that good money management practice keeps away from redressing operating budget issues. The reason it seemed hard for them to make that distinction in a meaningful way for the general public had, in our view, more to do with their defensive posture to begin with. Had the Council gone out in front on this shortfall matter, the way Fairfax has already, then it could have subsumed a modest capital improvement expense in the context of recognizing, facing up to and being pro-active in tackling the problem of the impact of the housing value downturn on its fiscal situation.
The same Council defensiveness was exhibited two weeks earlier in the reaction by some to the news that a half-dozen local businesses had closed, in fact, a notable number in a short time. Rather than look at the problem, and the fact that other small businesses here are struggling, some on the Council attacked the messenger for reporting the news, saying it was “bad for bringing in new business.” Moreover, that kind of reaction only served to obfuscate the more important message in the report, namely that the Falls Church Chamber of Commerce had redoubled its plea for the City to make its business license (BPOL) tax more competitive with surrounding jurisdictions.
In the wake of these two developments in Falls Church, of a revenue shortfall and of conditions facing struggling small businesses here, the Council has attacked the reports, but has had nothing to say about steps to address the problems. As such, it runs the risk of remaining “behind the curve,” continuing to appear defensive and reactive, not proactive.