F.C. Council Signs Off on 8.5¢ Tax Cut For Now

Among those participating in the annual Pinwheel planting event at the edge of Cherry Hill Park Monday were (left to right), City Manager Wyatt Shields, City Council members Marybeth Connelly, David Snyder and Debra Hiscott, and Housing and Human Services chief Dana Lewis. (Photo: News-Press)

As the Falls Church City Council gave a preliminary OK to its new FY23 budget that will be formally adopted in early May and goes into effect July 1, the action this Monday came in the context of jitters about the wider economy, fueled mostly the current inflation rate.

Veteran Councilman David Snyder this Monday gave the best summary of what the Council may be facing in the coming period, citing a series of “yellow flags” that could disrupt the overall economy and have consequences for the City’s budget.

There is the rising inflation rate, he noted, which has ballooned to 7.8 percent, the biggest jump since the early 1980s. There are the predictions by some major banks, including Bank of America and Deutschebank, that projects the U.S. economy heading into a recession. There are the systemic pressures to drive up salaries at all levels of local government, and there are “unknowns” like the impact that Gov. Youngkin’s cuts grocery tax and a possible gas tax will have, as well.

Councilman Phil Duncan noted that while the recommended budget submitted last week by City Manager Wyatt Shields seeks to offset a huge annual increase in residential real estate values with an 8.5 cent tax rate cut – both parameters the biggest in decades – it comes nowhere near alleviating City taxpayers from a hefty new tax bill coming upon citizens soon.

Duncan said that citing the case of the new assessments on this single family home that the tax rate would have to be lowered to about $1.13 per $100 of assessed valuation to break even with his tax bill last year.

So, Shields’ proposed 8.5 percent tax rate cut, down to $1.235 from its current rate of $1,32, has not entirely offset the exploding 11.4 percent increase in real estate values.

While Duncan was the only member of the seven-person Council to vote against the Shields budget plan this week for that reason, he did suggest that he might come forward with a deeper cut in the tax rate than Shields’ proposed $1.235l rate. Overall, he noted, getting the rate to equal the tax bills that City residents received last year would require lowering the rate to $1.19.

However, if that were to happen, it would require cutting deeply into the operational cost facing the City and its schools. Council member Debra Shantz-Hiscott noted that there are $3.9 million in unfunded needs in the budget, including the fact that the City’s roads are supposed to be redone every 20 years, but the City’s plan is to cover everything every 50 years.

Council member Letty Hardi noted that the City budget counts on some of its developers coming through with promised revenues, like $4. 5 million due soon from the West End Gateway Partners, developers of the 10 acre site that was where the former George Mason High School sat (now completely flattened awaiting robust development.)

In fact, it has been the revenues anticipated from such developments that have enabled the City to do as much as it has – a newly completed $120 million Meridian High School and thorough renovations of the Mary Riley Styles public library and City Hall – without over burdening local taxpayers.

These developments, that continue to come forward, are what “has enabled us to stay in the running” as one of the nation’s highest quality places to live and raise a family, Duncan noted.

Council member Marybeth Connelly questioned whether the new paving of City sidewalks, while aesthetically pleasing using brick, is actually safer than concrete sidewalks, given the often slippery nature of brick.

Shields also said he’s “reasonably confident” that the state legislature in Richmond will offset cuts in the grocery and gas tax rates and will be “made whole at the local level” though at this moment this is entirely unclear.