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Stafford Board of Supervisors looks at balancing the county budget in the face of declining real estate values Date published: 1/20/2010
BY JONAS BEALS
Stafford Supervisors yesterday learned what kind of challenge they will face over the next four months as they balance the upcoming 2011 fiscal year budget. County Administrator Anthony Romanello has been warning of a coming budget shortfall for more than a year, but recent figures give a better idea of how the steep drop in real estate values will affect county revenues. Earlier in the month, supervisors directed staff to look at two different budget scenarios--one that equalizes the real estate tax rate for residential property, and one that sets the rate to equalize the real estate tax for commercial property. In both cases, staff removed the $2.4 million in projected revenue from the business, professional and occupational license tax. There is a public hearing to repeal BPOL scheduled for Feb 2. The tax--scheduled to go into effect at the beginning of the month but immediately suspended--has never been collected. "Both scenarios would result in lower revenues than fiscal year 2010," said Budget Director Nancy Collins, explaining that neither of the scenarios would cover the projected $5.8 million budget gap. County officials can only set one real estate tax rate for all property, and equalizing the rate means that property owners would pay, on average, the same amount they did last year. Although figures have not been released, the Commissioner of the Revenue's office has completed reassessments that reflect a general decline in property values in the county. Commercial values have declined at a slower pace than have residential properties. If equalized for residential property, the real estate tax rate would rise from the current rate of $0.84.to $1.14 per $100 of assessed value. Although it would bring in roughly the same revenue as in the current fiscal year, it would still result in an overall budget shortfall of $5.8 million. The proposed equalized rate for commercial property would set the overall real estate tax rate at $1.03 and create a $19 million shortfall. Romanello is scheduled to present the first proposed budget to the board on March 2. The board hopes to adopt a budget and tax rates at its April 20 meeting.
BOS suspending BPOL is fine ? but without answers to what corresponding spending will be cut or what other revenue stream will be increased is reckless and disappointing, but not surprising. Homeowners ? hold on to your wallets.
Who would give up such a new and fairly reliable revenue stream as BPOL without offering some comparable replacement? The past 15 year BPOL revenue for Fred was $52.7M and Spotsy $40.9M, Fully implemented Stafford's minimum revenue over the next 15 yrs would be ($8M x 15) = $120M. The only revenue to have gone up any where near $120M in 15 years is Real Estate Property taxes on homeowners. Existing debt service (loan principal and interest payments) over the next 15 years is $415M not counting new debt.
repeal for both this years budget and the FY11 budget is $5 Million from general fund revenue and $2 Million from the transportation fund. The budget projections presented are on the County side of the Budget. It does not include the millions in state funding cuts to the schools.
The BOS will have to either raise taxes or make cuts so deep that the Stafford residents will rebel. The BOS also has to be aware that state funding may be cut even more. How will they make up this shortfall? Even keeping the real estate tax that owners pay at the same level as last year will require a tax hike. Repubs can sugarcoat as much as they want, but looking back at their rhetoric would indicate that any increase in the real estate rate MUST be considered a tax hike.
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