Surprising observers throughout the region, the City of Falls Church adopted its coming fiscal year budget Monday by a unanimous vote that raised the residential real estate tax by a mere two cents. The $76,427,560 Fiscal Year ’09 budget fully funds the School Board request and will actually cost the average taxpayer in Falls Church $174 less than a year ago.
Credit for the eased impact on City taxpayers goes to the development of large scale mixed use projects in the commercial corridors of the City, which in the past two years has offset what would otherwise have been a 14 cent increase in the residential tax rate.
As it is, the tax rate will increase from $1.01 to $1.03 per $100 assessed valuation.
As a result, Falls Church’s tax impact on its citizens will be less than for any other jurisdiction in the region, as neighboring Arlington and Fairfax Counties limited real estate increases to three cents, but then added a burden of an added 10 and 11 cents, respectively, on commercial real estate.
They utilized the new ability to tax commercial land at a higher rate than residential, provided Virginia jurisdictions for the first time this year by the state legislature. Falls Church chose not to exercise that option in its new budget out of concern for the impact on the many smaller businesses in the City who would bear the brunt of such an increase.
The precipitous decline in the growth of residential real estate values, upon which many consider Falls Church to be overly dependent, was expected to create a far more difficult situation for the City budget than what materialized, with the new mixed use projects, some completed and some under construction, credited with saving the day.
In regional jurisdictions also hard-hit by the real estate crisis, the impact on local tax rates was far more severe. The City of Leesburg, for example, was compelled to adopt a whopping 35 cent increase, from 97 cents to $1.32.
Falls Church’s new budget, which goes into effect on July 1, provided the School Board’s full $30,117,600 request. While some non-classroom positions were eliminated by the schools, classroom sizes were maintained and despite some increase in enrollment, vital new programs were added for the fall, including foreign language classes and the extension of the rigorous International Baccalaureate curriculum to the elementary grades.
New programs added on the City operations side included a one-time cost of $482,373 for the re-implementation of the “photo red light” program in the City, reauthorized by the state legislature last year. However, $427,500 of that cost is expected to be offset by tickets issued as a result of the program in the first year.
Also, the City added funds for a new professional project manager position to oversee the $317 million City Center South development approved by the City Council in February, but the funds for that will be provided entirely by the project developer.
Programs for mentoring at-risk youth and measuring energy use to reduce greenhouse emissions were also new programs funded modestly in the new budget.
Eight work sessions and three public hearings went into this year’s budget deliberations by the City Council since City Manager Wyatt Shields made his budget recommendations in early March. The result was that the Council was able to shave a penny (worth $366,000) of the tax rate below what Shields originally recommended.
That was accomplished despite reductions in state contributions to the budget and other factors reducing income projections by $280,000 below Shields’ estimates.
“This budget was great work for everyone, starting with the School Board,” said Council member David Chavern.
His remarks were echoed by all others on the Council, all of whom also cautioned about tougher challenges ahead as the City faces the need for new school facilities and upgrades of existing municipal structures.