The unanimous vote recorded at the Falls Church City Council meeting last week — the one that gave a preliminary OK to a Fiscal Year 2019 budget with a 5.5 cent tax rate increase — could not have been more meaningless, Council members have commented to the News-Press.
That’s because there is one as yet totally-indeterminate but king-sized facet to the proposed budget, as presented by City Manager Wyatt Shields last month. It has to do with the demand of the Washington Metropolitan Area Transit Authority (WMATA) for a major boost in funding to fix its many woes. The total it is demanding from Virginia is $154 million in new money, and Falls Church’s share of that would be $1.1 million, or at least 2.5 cents on its real estate tax rate (per $100 of assessed valuations).
It is with that gigantic bite for WMATA’s Metrorail line, which does not even touch into the Falls Church city limits, the tax bill that City residents could be liable for would be that 5.5 cent increase, from $1.33 per $100 now to $1.385, and that is what the Council voted for in a preliminary step last week.
Falls Church City Manager Wyatt Shields, when he presented his recommended budget last month, cautioned the Council then, “This proposed Budget assumes a worst-case scenario in terms of state funding for WMATA, and it is possible that state funding will alleviate the City expense. The General Assembly does not appear able to enact a dedicated state revenue source for WMATA, but it does appear likely that the state will raise some new funds and redirect some existing revenues that will allow the City share to be reduced.”
So in the past couple weeks, lawmakers, including Gov. Ralph Northam and Falls Church’s delegation of Sen. Richard Saslaw and Del. Marcus Simon, have been working overtime in Richmond to find a way to alleviate this pressure on local jurisdictions by finding state funds to use for picking up the WMATA tab.
It’s looking more and more like that will happen, but no one is willing to place a bet on it yet.
Sen. Saslaw introduced a bill, SB 856, in which he said he “cobbled together” funds to pay for WMATA’s new demands by increasing the hotel and transient occupancy taxes and a higher grantor’s tax for Northern Virginia which, along with smaller sums of money coming from other parts of the state, would add up to the $154 million.
A summary of Saslaw’s bill states that it “makes numerous changes to the administration of and revenues for mass transit in the Commonwealth, specifically as it relates to funding of the Washington Metropolitan Area Transit Authority (WMATA) and the disbursement of funds in the Commonwealth Mass Transit Fund. The bill sets a floor on the average price of fuel used to calculate the regional motor sales tax as the price of gas on February 20, 2013, the same floor that is used to calculate the state fuels tax. The bill uses a variety of existing revenue sources to allocate revenues for mass transit and authorizes the issuance of $50 million in bonds only for a required federal match. The provisions of the bill are contingent upon Maryland, the District of Columbia, and the federal government adopting similar actions to raise revenues for WMATA. The bill incorporates SB 393 and is identical to HB 1539.”
Del. Simon told the News-Press that this is a preferable approach to one which would reallocate funds from the Northern Virginia Transportation Authority, effectively robbing Peter to pay Paul, as an alternative proposed bill from Del. Tim Hugo (R-Clifton) provides.
Simon said, “My hope is that more of Virginia’s $154 million contribution will come from statewide general fund resources. If that happens, and we are able to keep the gas tax floor in, hopefully the City of Falls Church won’t need to raise its real estate tax for that.”
Simon added, “No one can say for sure what the outcome will be, but everything I’ve seen and heard publicly and in my discussions with the governor’s office indicates we will move toward the Saslaw model and away from the Hugo model.”
He also said that Gov. Northam plans to weigh in with his own ideas. “Although the final details are not yet available, I think it is safe to say that the governor’s version will probably more closely resemble the version that came out of the Senate under Dick Saslaw’s patronage than it will with the House’s Hugo bill.”
So it will apparently come down to how much effort Gov. Northam is willing to put into an effort to help local jurisdictions with this, along with his Democratic colleagues in the legislature.
The bottom line is that there is an even chance, at least, that the 2.5 cents that was placed in the “first reading” version of the FY19 budget for Falls Church will not be needed, at least not all of it.
That could lower the proposed tax rate down from a 5.5 cent increase to 3 cents, which would be a fairly significant outcome given that it includes the equivalent of 6 cents to cover debt service on the bonds that voters approved for a new high school last fall and a newly renovated Mary Riley Styles Public Library the year before, and the renovation of City Hall that is currently underway.
This is achieved by limiting the growth in the City’s operational budget to 1.7 percent and holding the School’s request to 2.8 percent, the lowest growth in many years. It is also offset by the robust commercial and mixed use growth in the City contributing to an overall 3.7 percent revenue increase.
The City will host another public town hall on the budget, and other matters of interest to citizens, this Sunday at 2 p.m. at the Community Center.
