As of the News-Press’ deadline late Wednesday, officials in the City of Falls Church had no new information about what share of the massive $1.9 trillion federal American Rescue Plan would come for use in the Little City.
City Manager Wyatt Shields told the News-Press that, pending more news, City Hall is going ahead with some tentative planning based on the estimate, reported by U.S. Rep. Don Beyer and reported in last week’s edition, that the City can expect $13.28 million.
But that number is as yet far from secure, pending more announcements from the U.S. Treasury Department, as is better information on how the money can be spent. The biggest unanswered question swirling around City Hall is, for example, if it can somehow be used to lower the real estate tax rate.
That’s what some members of the City Council are hoping for as they grapple with the next fiscal year’s $106 million City budget. On Monday they set the proposed real estate tax rate a half-cent below what Shields recommended last month — dropping it a penny-and-a-half to $1.34 per $100 of assessed valuation — for official notification to City taxpayers.
Under the law, the finally agreed upon rate, to be set in late April, cannot go higher than the advertised rate announced this week, but it can go lower.
A motion by Council member Phil Duncan to lower the rate an additional penny, to $1.33, failed to pass, with four votes from Mayor Tarter, Vice Mayor Connelly, Letty Hardi and Debbie Hiscott voting down the proposal over votes from Duncan, Ross Litkenhous and David Snyder, 4-3.
The subsequent vote that passed with the rate at $1.34 passed 5-2 with only Duncan and Litkenhous voting against that, and Litkenhous changing his vote to “Aye” shortly after that.
That would lower the dollar increase in City real estate taxes to more like $200 for the average single family home, given that assessments on those homes have risen by 4.2 percent as determined by the City Assessor in January.
Shields told the City Council Monday that he is hopeful the federal Treasury will be forthcoming with considerable added information by the end of next week, which will be plenty of time for the Council to factor in the impact before finally adopting its FY22 budget for the fiscal year beginning July 1.
In addition to real estate taxes, the Council is eager to see whether the federal money can be used to alleviate storm water tax pressures on citizens. Shields’ proposed budget recommended a 2 percent increase in those, but substantially higher rate increases in the coming years.
To completely eliminate any dollar growth in the real estate tax would require access to a new $960,000 in revenue, which would be only a small portion of the $13 million that may be coming to the City and would make the legal question of whether that money, provided under what is called the American Relief Plan, can be put to that purpose.
To be sure, other jurisdictions in the region face similar concerns, and talks of lowering their tax rates by three cents or more.
One Falls Church developer has repeatedly said that if the City takes full advantage of all the offers for economic development now in the pipeline and due to follow on them, that within a decade the City’s real estate tax rate will drop by closer to 20 or 30 percent, not the tiny number being talked about now.
Duncan said the City’s currently prioritized stormwater projects should be rendered “shovel ready” as quickly as possible so that they will be in line for federal dollars as soon as they are given the OK.
Shields counseled the City Council to be cautious now pending better information on the amount, allowed uses and other factors associated with the expected federal funds. “Soon enough the Council will have the information it needs, but we are not there now,” he said. “Without more information, I think it is prudent to proceed with caution.”
Vice Mayor Marybeth Connelly said, “While I appreciate the optimism of Ross (Litkenhous) and Phil (Duncan), I am worried about reducing the tax rate too far right now. Mayor David Tarter added, “What we can and cannot do with the federal money will be critical.”
Hardi stressed that it is critical the Council “align on principals for how to use the federal money to best achieve transformational change.”
In other Council news, Colin Brody of the Fairfax Health Department, which has jurisdiction over the City’s Covid-19 response, said that with 119 new cases in the Fairfax District (including Falls Church) Monday, the total has reached 70,860 with a positivity rate (percentage of those tested testing positive for the virus) at 5.1 percent, compared to the 5.0 percent rate that is considered “good” by the World Health Organization.
He said there are currently 281 hospital beds treating Covid-19 patients in the area, 40 in intensive care and 25 on ventilators.
On vaccines, he reported that 290,853 doses have been administered so far, and with 359,000 entering wait lists.
In Falls Church City, he said, 3,475 have received at least one dose, and 1,378 have been fully vaccinated.