Having heard the recommendations of City Manager Wyatt Shields Monday to address the current economic crisis with a combination of layoffs, program cuts and a small tax increase, the Falls Church City Council must now wrestle with how to play the annual budget balancing act game in the context of shrinking resources.

As Shields reported Monday, this is the first time in the memory of many long-time City employees that an across-the-board salary freeze has been proposed for the entire City-side staff, in combination with the “de-funding” of seven positions, four full-time.” Even more sobering is the prospect that things aren’t about to get better anytime soon. Even if the overall economy begins to recover by the end of the year (definitely not a sure thing), the values of residential real estate are most likely to settle in, for the long-term, at levels significantly below the ridiculous peaks they attained before the bubble burst.

This means that for Falls Church, and all comparable jurisdictions everywhere, maintaining the level of spending on government services reached during the gravy days of plentiful revenues from residential real estate will be particularly challenging for many years going forward, even as the economy stabilizes and begins to recover. Because Falls Church has always been so lopsided in its dependence on revenues from residential real estate taxes, the likelihood it will have to draw down its spending levels to pre-bubble levels is very great, at least until new commercial, retail and mixed-use alternatives begin to kick in big time. It means that as the City Council begins to wrestle with this budget, it will have to make decisions that take this reality into account.

Given this, for example, it is important that the Council discern preferences for programs that will be bedrock in terms of generating important new revenues as the economy rebounds. That would mean protecting or even enhancing programs that can help spark new revenues in commercial development, in particular.
Therefore, the City Manager’s suggestion to completely de-fund the GEORGE Bus System may not be wise. That’s true if GEORGE is used for its economic development potential, rather than as a private taxi cab for already overly-pampered commuting residents (after all, right now the cost to the City of a single ride on GEORGE is greater than cab fare). A scaled-back GEORGE, limited for now to use as a shuttle from the East Falls Church Metro to the State Theatre and other downtown destinations from afternoon rush hour to midnight, would stimulate sustainable new net revenues from visitors to town.

Similarly, by lowering the City’s business license (BPOL) tax on professional services to a level equal to Fairfax County’s, the City would signal it is serious about attracting new business. This would not cost much, but again, it would lay the basis for future revenue growth.