County’s decision: Cuts or tax hike

By Brandon Shulleeta

Published: November 13, 2008

Albemarle County supervisors butted heads Wednesday over whether to start with a budget recommendation that has major cuts in spending, or one with a major tax hike.

Chairman Kenneth C. Boyd, a Republican, said the county’s executive office should recommend a budget for next fiscal year that has a 74.5-cent real estate tax rate — which would effectively tax the average homeowner the same as this year. The lower tax rate would mean substantial cuts in county services.

Vice Chairman David L. Slutzky, a Democrat, said the county should start with a tax rate closer to 90 cents — which would allow the county to avoid service cuts, and then systematically decide which of those services should be cut or scaled back.

The discussion is likely to be a preview of long discussions by the board about how to balance the need for county services with the option of increasing real estate taxes.

The county faces a projected $4.9 million operating budget shortfall for the current fiscal year. The situation is only projected to get worse next year as the county will have to deal with revenue losses from a wounded housing market and fewer retail sales.

The county’s executive office has been trying to formulate a scenario where county services could be cut without increasing real estate taxes. Due to declines in real estate values, the county projects that the current 71-cent tax rate would have to be increased to 74.5 cents next year for the average homeowner to pay the same amount of taxes.

The county executive’s office showed supervisors a scenario where a budget could be formulating using a 74.5 cents real estate tax rate and making several cuts to county services. The plan would have an employment freeze on 47 vacant positions by next fiscal year, eliminate employee raises and make numerous cuts to county-funded agencies. In addition, areas such as transit would see cutbacks.

If Albemarle were to try to make up for the reduction in revenue without cutting county services, the real estate tax rate would have to be increased to about 91 cents, according to figures providing by county officials.

Slutzky said that he’s not endorsing a 91-cent tax rate. Instead, he said that the Board of Supervisors should be presented with a service-based plan, and the cost and value of each item could be weighed individually. He said that some services will have to be trimmed, and it’s only fair that the Board of Supervisors be honest with the public about which services would get cut.

Boyd, however, said that he has a “serious problem” with a 20-cent tax increase. He said the board should practice “responsible government” by making ends meet without looking to raise taxes.

Supervisor Dennis S. Rooker said that it was a philosophical debate about where the budget process should begin, but he said that he tends to side with the idea of using the lower tax rate as a starting point for the discussion.

Bill Letteri, the county’s director of facilities development, recommended revisions to several major capital improvement projects as part of the county’s new five-year plan. 

The Crozet Library would be slated to finish in 2013, instead of 2011. Jail facility maintenance would be delayed five years, and transportation funding would be cut. The revision would also create massive cuts in funding for new fire stations, among many other delays and funding cuts

The executive office plans to meet again with the Board of Supervisors on Dec. 3 and recommend a budget to the board on Feb. 18. The Board of Supervisors is scheduled to adopt its fiscal 2010 budget on April 8.