NEWS- Good times: City budget soars 12%, Albemarle's up 6%
Flush with cash from ever-rising real estate taxes, Charlottesville and Albemarle proposed budgets March 2 that increased 12 percent in the city and 6 percent in the county.
Despite managing a shrinking population, City Manager Gary O'Connell's $123 million operating budget for fiscal year 2007-2008 will spend $13 million more than last year. Along with higher real estate assessments– up on average 15 percent– Charlottesville expects revenues overall to increase 10 percent from meals taxes, hotel taxes, and $13 million in revenue-sharing from Albemarle County, which has an agreement with the city to share 10 cents of every 74-cent tax payment (to keep Charlottesville from annexing).
O'Connell cites education, public safety, and affordable housing as the top concerns for city citizens. "Unprecedented" is how he describes the plan to fully fund the schools' $38 million request. The $4.3 million increase– 13 percent over last year– is the largest increase ever.
The city budget earmarks $1.75 million for a new affordable housing program, and it increases eligibility for tax relief to homeowners assessed at $273,930. "If you were eligible last year and your assessment went up, we want to keep you eligible this year," explains O'Connell.
The proposed budget puts the city in the rescue squad business, with $956,000 earmarked to supplement Charlottesville Albemarle Rescue Squad (CARS) and hire staff. Public safety gets more funding for technology, such as cameras and computers in police cars. "They're things we've wanted to do, and now the economy is better, we can," says O'Connell.
The windfall budget allows another $100,000 for Sunday bus, trolley, and JAUNT service.
And O'Connell suggests putting a budget surplus– there's $7.8 million left over from the 2005-2006 fiscal year– into one-time capital expenditures. "We're in a good economy, and we need to do those things we hadn't been able to do," he says.
The budget went before City Council March 5. Even before receiving it officially, City Councilor Kevin Lynch called the 12-percent increase "unjustifiable."
More reasonable, says Lynch, is starting with a 6 percent increase, and then adding programs he thinks people would support, like Sunday bus service, more money to CARS, and affordable housing. "Those things are at most another 2 percent," he says. "That still gets up to 8 percent."
While he believes reducing the tax rate is a "crude tool," it's one of the few options City Council has, and he will be looking for a 4-cent reduction in the $.99 per $100 value rate. Lynch says he doesn't think it would be that difficult to get to a $0.90 tax rate.
"I think there's some real unfairness with our tax system, and we're not doing a good job with commercial assessments," he says.
Though there are tax relief programs for low-income citizens, those who are really hurting, says Lynch, are young couples who bought a house for $150,000 in Belmont in 2000 and paid around $1,500 in property taxes. Today, that house has tripled in value, Lynch says, to $450,000 with a $4,500 tax bill. "That's a lot of people in that situation," he notes.
Lynch takes issue with the 4 percent salary increase for employees, questioning whether the cost of living has gone up that much. "Most of those increases are for health insurance, and we foot the bill for that," he points out.
The important thing about the upcoming budget discussions, says Lynch, is to "lay this budget out, not as a fait accompli, but a series of choices we have to make."
O'Connell notes that a 2006 budget survey showed that 60 percent of those surveyed feel the city should keep taxes and services the same.
"I think most people do want services and taxes to stay the same," says Lynch. "But that's not happening here. Taxes are going up 15 percent."
Over in the county, the Albemarle Board of Supervisors got a look March 2 at County Executive Bob Tucker's $266 million operating budget, a 6.7 percent increase over last fiscal year. Overall, the county is looking at a 5.6 percent increase in its total $315 million budget, thanks to a decrease in capital expenses.
Under the revenue-sharing agreement, Albemarle anticipates forking over $13 million to the city– a 30 percent increase in the coming fiscal year. Tucker anticipates the possibility the supervisors will cut Albemarle's $.74 per $100 tax rate, and he's built in a $3.5 million reserve that would translate to a $.02 cut.
Republicans are calling for the city and county not only to acknowledge that state law calls for each locality to drop the tax rate to offset the increased tax. In the county's case, that rate would be $0.58; for the city, it would be $0.875.
"The board will set the rate at a public hearing as required by law," says county spokeswoman Lee Catlin. "That's nothing new, and it's something the board always does."
And, reminds Tucker, no matter what Albemarle's tax rate is, the revenue sharing agreement still gives Charlottesville $0.10, so if the rate drops to $0.58, that effectively leaves the county just $0.48 to work with.
County classified employees, too, get on average a 4 percent salary increase.
Albemarle is investing in four new cops and six new firefighters, the latter an acknowledgement that the county is increasingly urban, and that volunteer firefighters aren't always available during the day.
County schools get 60 percent of Albemarle's budget, and unlike their flush compatriots in the city, the proposed budget is $1.9 million shy of what county schools requested.
While Albemarle, too, has benefited from skyrocketing real estate assessments, Tucker doesn't expect it to last. He foresees next year's assessments to increase a comparatively low 5 percent.
Supervisors will hold two public hearings and four work sessions before they adopt a budget April 11. "That's a political decision, in my mind– lowering the tax rate," says Tucker.
City Councilors also have upcoming public hearings and work sessions, and will decide on a budget April 10.
"The county has some real expenses," says city resident John Pfaltz. "They're growing." He's more puzzled by the proposed Charlottesville budget.
"The city is shrinking," he observes.
County exec Bob Tucker proposes a budget with a 5.6 percent increase, and he's ready if the supes drop the tax rate by two cents.
PHOTO BY JEN FARIELLO
City Manager Gary O'Connell says the city can afford a 12 percent budget increase and should take care of all those one-time infrastructure expenditures while the revenue is still flowing into city coffers.
PHOTO BY JEN FARIELLO