$190 Million Shortfall Looms

"We are not looking for any decisions," County Executive Craig S. Gerhart said of today's meeting. (Ho)
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By Kristen Mack
Washington Post Staff Writer
Friday, October 31, 2008

Prince William County faces a $190 million shortfall in school and county spending in the coming budget year because of an expected 30 percent decrease in home values, an issue the Board of Supervisors will begin to grapple with today at its fiscal retreat.

Although there has been a home-buying frenzy in the county, it is still in trouble because of foreclosures and plunging prices. The county's housing market is not expected to recover until 2013.

Prince William officials must also cope with continued drops in sales tax receipts, which fell each month for five straight months this year compared with the same period last year.

An advance copy of a report of the fiscal outlook prepared by the county executive's office suggests that to close the gap for fiscal 2009-10 there probably won't be any increases in police and fire department staffing. It also means potentially eliminating some capital improvement and road projects. In coming years, parks and libraries might face the same fate, the report says.

"We are not looking for any decisions," County Executive Craig S. Gerhart said of today's meeting.

Another option the board will consider is increasing the property tax rate from 97 cents to $1.13 per $100 of assessed value. But because house values have decreased so sharply, the average homeowner's tax bill would still decrease by 18 percent. Last year, supervisors raised the average tax bill 5 percent to help offset the shortfall.

Even after scrubbing the budget, eliminating some capital projects and increasing the tax rate, the county would still have a $26 million gap to close. That's where service cuts would come in.

Gerhart asked county departments and agencies to show him what their budgets would look like cut by 10, 20 and 33 percent.

If the police department's budget shrank 20 percent, it would have to eliminate the Criminal Alien Unit, a key function of the county's policy to crack down on illegal immigration. It also means Prince William would lose its ability to work with federal authorities in processing illegal immigrants who have committed crimes.

"I can't imagine we are ever going to cut into safety that much," said Chairman Corey A. Stewart (R-At Large). "We spent a grueling year putting this policy in place. At a minimum, we are not going to scrap it."

Unlike other Washington area jurisdictions, Prince William officials do not predict a deficit for the current fiscal year, which began July 1. Spending is down $7 million for the first three months.

But the county is among several area jurisdictions where huge shortfalls are predicted for the coming budget year. Fairfax County officials expect a shortfall that could reach $500 million in fiscal 2010, and in Loudoun County, the projected shortfall is $176 million.

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