County weighs need for tax hike

By Brandon Shulleeta

Published: August 19, 2008

As Albemarle County battles a sour economy, some officials are eyeing the possibility of tax increases, but a local anti-tax group is trying to kill that idea before it grows wings.

This week, Gov. Timothy M. Kaine gave a gloomy outlook of Virginia’s economy and made clear that state budget cuts are on the way. Some legislators suspect the state budget shortfall could exceed $1 billion.

To make it worse, Albemarle County officials expect figures out next month to show that county revenue is drastically declining.

“What we all know is that the real-estate market stinks. Property values have dropped. And therefore our revenues are going to be dropping,” Supervisor David Slutzky said. “So, we’re going to have to make some really tough decisions this year, but they’re going to include: How much do we have to raise taxes?”

But raising taxes next fiscal year is unnecessary, said Keith Drake, chairman of the Albemarle Truth in Tax-ation Alliance.

Drake said he thinks “revenue is going to be more than enough to meet our needs” and Albemarle government needs to focus more on spending efficiently.

“That’s the easy way out,” Drake said of tax hikes. “Slutzky has never been one to step up to the plate and really address the issue.”

The taxation alliance has been critical of Slutzky since the group formed in the winter of 2007. The group is on acampaign to encourage Albemarle County to spend money more efficiently. However, as to whether Albemarle has been fiscally inefficient in the past, Drake said: “I don’t know.” The county hasn’t done enough to answer that question, he said.

Slutzky said the board’s first objective is to cut unnecessary spending. He referred to a board decision last month to hire an outside group to review how efficiently the county is using its resources.

“I don’t know that we will raise taxes,” Slutzky said. “We might instead choose to stop providing services, but we really can’t do that.”

As incoming tax revenue is decreasing in Albemarle — in step with a wounded state and federal economy — cuts may have to be made to the current $334.7 million budget, some say. Others suggest the county could tap its reserves for the needed money.

The bottom line is that the board can do little to affect the amount of revenue that the county will receive this year, Supervisor Dennis S. Rooker said.

That means the county will have to “scramble” to make ends meet, Supervisor Sally H. Thomas said.

Slutzky and board Chairman Kenneth C. Boyd agreed that the supervisors will tighten spending in some areas this fiscal year and consider whether tax increases are necessary for the next budget cycle. Thomas said it is too early to predict whether any increase might be necessary next fiscal year.

“Our guess is that the governor, across the board, is going to make some kind of cut,” Boyd said, “And if we couple that with [the county’s] own shortfall in revenues, which we’re experiencing … it’s going to be a real challenge for us.”

Even areas such as education, for which localities rely heavily on state funding, are open to review for possible budget cuts, Kaine told the General Assembly.

County staffers are expected to present revenue estimates for the current fiscal year to the Board of Supervisors on Sept. 10, Albemarle spokeswoman Lee Catlin said.

While the specific figures are not yet prepared, it appears the county will have to tighten spending — the same situation that localities throughout the state face, Catlin said. Charlottesville, for example, faces a projected $1.78 million deficit.

Inadequate funding for core services has adverse effects, Slutzky said, citing a lack of adequate funding in Charlottesville and Albemarle County for police officers. The result has been a recent gang-related crime problem, he said.

But the problem isn’t exclusive to Virginia, Kaine said, citing nationwide turmoil in the housing market and high gas prices.

Slutzky said General Assembly House Republi-cans are partially to blame for the state’s budget problems.

They didn’t set aside enough money when the state’s economy was sound, he said, and local governments now need to raise taxes during an economic downturn, which he said is the worst time to raise taxes.

Del. Rob Bell, R-Albemarle, said raising taxes now isn’t wise, adding that even Kaine recognizes that. He argued against putting blame on House Republicans, saying they oversaw an enormous surplus for the state.