Recent developments in the process leading to the adoption of the next fiscal year’s budget for the City of Falls Church suggest that City Hall may be resorting to unusually conservative forms of both measurement and policy in calculating its projected revenues.
The newest matter involves the result of an independent News-Press review of public documents concerning the relation, or lack thereof, of the City Assessor’s announcement of single detached family home assessments this week and actual home sale prices over the last six months.
As reported on Page One of this edition, the assessor’s report that single detached family homes increased in value by only four percent during the past year flies in the face of an actual comparison of sale prices of the 35 such homes that were sold since July 1, when evidence indicated the market began heating up.
Comparing the sale prices of those 35 homes with their assessed values as of one year ago showed that these homes sold for, on average, 15.5 percent more than their assessed values.
Since state law requires that real estate assessments be calculated to reflect 100 percent of the fair market value of assessed properties, this evidence points to a significant disconnect.
In short, were assessments increased by 15.5 percent, reflecting all the single family detached home sales in the past six months, instead of only four percent, then the City would have access to significantly greater revenues for its upcoming budget than what is currently officially projected.
This should be a matter of considerable concern for taxpayers, since a significant increase in revenue from current real estate values would ease pressures on both raising tax rates and cutting services. Moreover, it would provide relief for City homeowners in the form of their potential to borrow against the value of their properties if needed in tough economic times.
Another constraint on revenues available to the City is the insistence at City Hall that the City’s fund balance be restored to levels established by City policy, and that debt incurred be restrained to half of the level allowable by state law.
As was pointed out by City resident Robert M. LaJeunesse, Ph.D., a senior economist at the U.S. Equal Opportunity Commission, during last weekend’s town hall meetings on the budget at the F.C. Community Center, a rush to restore the City’s fund balance amounts to “replenishing a rainy day fund when its raining.”
The combination of perhaps-radically conservative real estate assessments and an untimely rush to divert revenues to restore fund balance levels, on top of a refusal to incur debt, is doing at least two things that citizens need to be aware of. First, by shifting the source of tax revenues from assessments to the tax rate, when values do rise, taxpayers will be stuck with higher tax rates. Second, by restricting revenue projections, pressures are increased to cut services, including for the City’s schools, beyond where they may otherwise need to be.