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.
Collins also reported that the budget for the current fiscal year is on target, and the board released most funds that were withheld pending a mid-year review. Those funds included an additional $4.8 million for county schools to go along with the $2.4 million that they received in December.
While some revenue numbers like sales tax and recordation fees were down, real estate tax collections were up slightly and the county was able to save an additional $1.2 million due to initiatives like a hiring freeze and cuts to health insurance.
"We feel comfortable we'll make it through the year," Collins said. "We've got some problems to solve and we're working on it."
In other business, supervisors passed a Technology Zone ordinance that could provide incentives for various new high-tech businesses to locate in Stafford, or for existing businesses to expand. The economic development ordinance passed unanimously.
"I believe we need this tool in our box of enticement to attract new business to our county," Supervisor Harry Crisp said.
Jonas Beals: 540/368-5036
Email: jbeals@freelancestar.com