Could be worse: City and county budgets unveiled
City and county government employees won't be getting raises– but at least they're not getting laid off. Yet.
Charlottesville city manager Gary O'Connell and Albemarle County exec Bob Tucker revealed February 17 how they plan to deal with reduced revenues and state shortfalls over the 2009-10 fiscal year. Both note that their respective domains are in much better shape than other jurisdictions in Virginia that are laying off employees. But of the two, Albemarle is feeling more pain.
Albemarle's $268.2 million 2010 operating budget– $1 million less and .4 percent smaller than fiscal year '09– requires a nearly 6-cent tax increase in the current 71 cents per $100 assessed value.
Tucker balances his budget by boosting the tax rate to 74.2 cents, and adds another 2.5 cents at the behest of the Board of Supervisors for a revenue shortfall contingency fund. A homeowner of a median priced home whose assessment went down the average 4 percent would see property taxes go up around $77.
"I have serious concerns about it," says Peter Wurzer with Albemarle Truth in Taxation Alliance, who notes that the state's quarterly estimated income tax payments are down 27 percent and describes the current economic situation thusly: "I think right now we're looking at an abyss."
If economic conditions worsen, he fears the Board of Supervisors will spend all of a 77-cent tax rate, and wonders why they haven't been accumulating a contingency fund since 2000, during which time he says property taxes doubled.
"I'd be in favor of [the contingency], but this is a heck of a time to do it," says Wurzer. "It's raining and the roof is leaking."
Speaking of roofs, the county's capital budget is sliced $100 million over five years, which postpones long-awaited projects like the Crozet library. And the proposed budget freezes 15 more positions to the 35 already frozen.
Charlottesville's $127 million operating budget is "a flat budget" with a decrease of .23 percent– "The first time I've seen a decrease in 30 years," says O'Connell. Only two years ago, the city's budget jumped 12 percent, thanks to ever-escalating property assessments.
The city, too, is funding a rainy day kitty: $2.8 million for an Economic Downturn Fund– without increasing the city's 95-cent property tax rate.
And Charlottesville gets a revenue-sharing windfall from Albemarle, which contributes 10 cents of its tax rate to the city. Because those numbers are calculated on revenues two years back, the city gets an additional $4.4 million for a whopping $18 million in FY 2010.
"The one that just blows my mind is the $4 million hit in revenue sharing," says Wurzer. "Ladies and gentlemen, we knew about this last year. This was entirely predictable."
Tucker points out that since the revenue-sharing agreement was signed in 1983 to keep Charlottesville from annexing the county, Albemarle's contribution has grown over 1,000 percent. "It will flatten out after 2010," says Tucker.
Asked whether he foresees any renegotiation of the revenue-sharing agreement, he said, "No. No. The agreement is pretty much set."
In the city, O'Connell notes that 14 positions have been permanently eliminated. Those include seven from the controversial plan two years ago for Charlottesville to have its own ambulance and medics to supplement the volunteer Charlottesville Albemarle Rescue Squad. The city has now determined that CARS has improved its response times, allowing the elimination of $300K in salaries from the nearly $1 million it budgeted in 2007 for staff and an ambulance.
Five intern positions also are eliminated– one in the city manager's office and four in neighborhood development– for a total savings of $33,440. However, in the budget's $2.17 million for City Council priorities, the Youth Internship Program is expanded and has a budget of $85,373.
"Two totally different things," says city budget director Leslie Beauregard. The Youth Internship is for at-risk kids, while the eliminated internships typically were held by college students.
There is one new position in the budget: an efficiency study recommends a $60,000 hire to track performance and efficiency, cost to be shared between the general fund and utilities fund. "It's the only place there's a new position," says O'Connell. "It wouldn't be there if the efficiency study didn't recommend it."
Another Council priority– the community dialogue on race– gets $50K.
"They're patting themselves on the back, but they've been using huge surpluses the past three years," says former city councilor Rob Schilling. "What they need to do is cut the budget by $5 million."
O'Connell defends the spending during fatter times. "We've been planning for several years," he says. "Part of the strategy was to do as many capital projects as we could during good times."
And now that the good times are over, "We can't really think about any new projects for the next several years," he says.
Bob Tucker notes that the county has been bracing for hard times for the past two years. Even so, it's nearly impossible to predict what's going to happen next. "It's a change game every month," he says.