While a lot of variables and as-yet-unknown factors prevail for now, the Falls Church City Council and School Board got together for their annual early-December launch of a new annual budget cycle at City Hall Monday, and learned that, at least for now, to meet current projections will require about a 4 cent increase in the real estate tax rate next year.
But that is as yet a long way from certain, with Mayor Letty Hardi getting the final word when she said, “The big unknown is what happens across the river.” She was referring to the arrival of the new president and administration in January.
The other major unknown is what enrollment in the Falls Church School system will look like come next September. The current enrollment in the five schools in the Falls Church system is at a record high this school year at 2,714, having grown by 80 students from the year before, Superintendent Peter Noonan reported at the combined work session.
While the projection of the Weldon Cooper Center at the University of Virginia has an additional 49 students enrolling next fall, that of the Steven Fuller Institute at George Mason University, whose representative Dr. Keith Waters attended the work session, is much higher at 283 new students.
The Fuller Institute number is so much higher, Dr. Waters explained, because “Falls Church is such an incredibly desirable community.”
It is based on an evaluation of the new housing types that are coming on line with the new developments in the city.
The Broad and Washington, West Falls Church and Founders Row 2 combined are expected to result in an overall increase in the numbers of households from 5,042 in 2015 to 5,534 in 2020, to 6,596 in 2025 and to 7,432 in 2030.
West Falls has 126 condo units and 400 apartments, traditional and “micro” units under construction. Broad and Washington has 318 rental units and Founders Row 2 has 280 units.
However, although the new multiple dwelling projects have already resulted in more City residents living in them than in single family detached homes, the growth in the student population is still coming predominantly from the single family homes, especially due to the teardowns of smaller homes and their replacement by much larger ones.
Meanwhile, a factor that used to be more flexible in calculating what the schools will need, that of salaries and benefits, is now more baked in, the result of collective bargaining agreement. It has established that a step increase and 2.5 percent cost of living adjustment (COLA) are fixed, as well as allocations for health insurance and private day programs. The step and COLA increases are estimated to be about $1.2 million each.
While those factors add up to about a 5 percent increase, they still are not competitive with surrounding jurisdictions, where raises are projected to be 7 percent in Fairfax and 8 to 9 percent in Arlington and Alexandria.
But as Dr. Noonan stressed, Falls Church has the benefit of being the No. 1 school district in Virginia, No. 2 in the D.C. Metro area, and No. 3 among best places to teach in Virginia. It is also one of only 8 in the entire U.S. offering an International Baccalaureate Continuum from pre-school through 12th grade.
The bottom line for the schools is that they need close to $5 million in additional funds in the coming fiscal year.
Overall, the outlook for the economy in the entire D.C. region is not rosy, especially with the new leadership in D.C. calling for what would result in massive layoffs of government employees, and with uncommonly high vacancy rates in commercial properties.
But Falls Church, as Dr. Waters reiterated, is insulated not by moats or mountains, but by its “desirability,” the fact that “people want to live here.”
Mayor Hardi noted that the last decade of development in Falls Church has added $2 billion to the value of real estate here.
The City’s Chief Financial Officer Kiran Bawa presented a preliminary revenue forecast that showed revenue from real estate taxes (at the current rate) rising 6.9 percent and all other taxes by 3.8 percent, for an overall 5.9 percent rise, bringing in $5.9 million in new tax revenue.
Falls Church’s real property values, including new construction, are rising by 7.3 percent compared to net decreases in the value of commercial and apartment properties in Arlington (as much as minus 2.6 percent) and Fairfax County (as much as 1.27 percent).
For Falls Church these include a 6.9 percent increase in real property taxes, a 7.6 increase in personal property taxes and a 4.9 percent increase in sales taxes. The meals tax is flat year-over-year despite the opening of a significant number of new restaurants.
Estimated cost increases for the City are compensation and benefits of $1.8 million and WMATA and other contractual obligations of $1 million, totalling just under $3 million. This leaves a gap of $2 million, and with a penny on the tax rate now equalling close to $500,000, filling that gap with additional taxpayer funds, as is, will involve about a 4 cent tax rate hike over the current $1.21 per $100 valuation.
