The discussion of the Fiscal Year 2017 at the Falls Church City Council meeting Monday centered on whether or not the real estate tax rate could be held to zero growth, or whether City Manager Wyatt Shields’ recommendation of a two-cent increase would be approved. The Council will set out to determine that and other aspects of the budget at this coming Monday’s work session at City Hall, with an eye to voting to formally adopt the $87 million budget on April 25.
Mayor David Tarter was among those this Monday who spoke of no tax rate increase, but Council member Karen Oliver questioned whether such a short-term goal for this year would not harm the City’s longer range fiscal sustainability.
Councilman Phil Duncan questioned the amount of fund tied up in the City’s fund balance, which is slated to be maintained at the top end of its range of 12-to-17 percent of the annual operating budget and data concerning projected school enrollment growth. The discussion also centered on whether the City should accept the $550,000 grant from its Economic Development Authority to construct a small pocket park on City-owned land in the 100 block of West Broad, although since it would be a matter of accepting or declining the offer of a grant, it would not impact the tax rate.
The request for funding from the City’s school system would probably be the target of efforts to hold the tax rate at zero, but this spring’s pre-enrollment for kindergarten in the Falls Church City Schools is a “very high” number of 146 so far, F.C. School Board Chair Justin Castillo reported to a town hall meeting on the F.C. budget last Saturday morning, signaling another major enrollment hike for the system in the fall.
At that town hall, which a sudden snow flurry helped to hold down attendance to only one citizen who was not a member of the City staff or on a City board or commission, Castillo and School Superintendent Dr. Toni Jones reiterated the enrollment growth factors driving the Schools’ request for a 5.39 percent increase in the City’s transfer to the schools in the budget.
Enrollment in the Falls Church school system has grown from 1,871 in 2006 to a projected 2,600 next fall, and while the City’s population has grown by a robust 20 percent since 2005, the school enrollment has grown by a whopping 47.5 percent and the City now has 17 percent of its total population in the schools, which is the highest ratio in the region, and much higher than Arlington’s 10 percent. But with budget constraints since the Great Recession, the amount spent per student in Falls Church, when adjusted for inflation, at $12,000 per pupil is still below the $14,000 number of 2007.
Castillo and Jones also noted that the City receives the lowest amount of state funds allowed by the state’s Local Composite Index (LCI) formula, a mere 12 percent of its budget (and the federal contribution at 1.1 percent is lower still). They noted that if Falls Church had the same LCI number as Fairfax County it would be getting an additional $1.68 million and if it were the same as Loudoun County, it would get an additional $4.1 million. Still, the Schools’ request from the City leaves $1.5 million in unfunded needs in the system for the coming year.
Castillo and Jones also strongly defended the effectiveness of the system’s English as a Second Language and special education programs, saying they are generating “phenomenal literacy skills” and with great attention to individual student needs. Standards of Learning test results are not a good measure of the effectiveness of these programs, they said, because they are inappropriate for what students in these programs bring as their backgrounds.
Shields noted in his remarks that the City’s proposed tax rate is significantly below the total rate for nearby Tysons Corner in Fairfax County, which has a combined rate of $1.49. The City’s rate has been held down significantly by the impact of economic development in the City, he added, as 4.5 percent of the total assessed values in the City now come from six acres of new commercially developed properties. Therefore, for residences, he noted, the increase from $1.315 to $1.34 per $100 of assessed real estate valuation would amount to an increase of $167 a year for an average single family home.
Big pieces in the growth of the budget include a 25 percent increase in health insurance premiums for many of the City’s 199 employees and a 400 percent increase in the City’s annual obligation to the Washington Metro Area Transit System, due in part to declining revenues from gas sales as the price of gas has dropped. Snyder noted that the burden of localities to absorb more of the costs of regional transportation is aggravated by legislative actions in Richmond, including a refusal to place a floor on the gas tax revenues. He said a 62 percent decline in state and federal funding for transportation is in the works.