Despite Planned Tax Increase, Budget Squeezed
Sunday, April 20, 2008
Three cents isn't what it used to be in Fairfax County. It's not even what it was in March.
The Board of Supervisors, scheduled to adopt a 2009 budget tomorrow, had hoped that the $68 million it will raise by increasing the property tax rate from 89 to 92 cents for each $100 of assessed value would be enough to cover funding shortages for schools, human services and code enforcement.
The rate increase will remain at three cents. Because property values dropped an average of 3 percent this year, most residents will see their tax bills remain the same or decline slightly.
But two things happened on the way to the new budget that made it a struggle last week for the board to shoehorn everything it wanted into a three-cent increase.
The first was the county's revenue outlook, which continues to buckle under the weight of an ailing national economy. On March 18, the Federal Reserve cut interest rates for the sixth time since September, further squeezing what Fairfax expected to earn from income on investments. Combined with declining sales tax revenue and rising fuel costs, it tacked an additional $24.8 million onto the $152 million shortfall officials faced when they assembled the budget, which begins July 1, earlier this year.
It meant that $68 million available from a 3-cent tax rate increase was actually $43.2 million.
The second was a growing sentiment on the board to restore cuts proposed by County Executive Anthony H. Griffin in the performance-based salary increase program for nonuniformed employees. To balance the budget, Griffin had cut maximum raises available in the "pay for performance" system from 6 percent to 3 percent.
Hundreds of restive county employees met with Griffin last week in the Government Center to question the move. Employee representatives also lobbied board members and prevailed. But restoring the salary program, and a small "market rate adjustment" for public safety workers, would cost $12 million.
Suddenly, the math didn't work. If the board kept its commitment to the school system for a $40 million increase -- about two of the three pennies on the tax rate increase -- the board would have about $3 million left for all the other holes supervisors want to plug.
This triggered an eleventh-hour search last week for $16.6 million to cover, among other things, raises for nonuniformed workers, extra staffing for the code enforcement strike team, psychiatric care at Inova Mount Vernon Hospital and continuation of CrisisLink, a suicide hotline.
Supervisor Sharon S. Bulova (D-Braddock), head of the board's budget panel, working with county staff and other board members, made up the gap with nips and tucks to programs, including those funding information technology upgrades, future retiree health-care costs and replacing county vehicles.
Board members said the adjustments were driven by a desire to make county employees whole. "Our constituents are looking for services, and our employees are looking for the morale to provide those services," said Supervisor Catherine M. Hudgins (D-Hunter Mill).
But the final plan remains a compromise. Supervisor Jeff C. McKay (D-Lee) questioned giving the school system an additional $40 million during such difficult economic times. He noted that county estimates place next year's revenue gap at $350 million. "In a bad year we're giving $40 million," McKay said. "What are we going to do in a terrible year? I remain very concerned about the message we're sending."