City Manager Mark Jinks presented his FY2018 budget this week. He proposed a General Fund Operating Budget of $712.5 million and an All Funds Operating Budget of $873.7 million. The FY2017 approved General Fund Operating Budget is $678.5 million and the All Funds Operating Budget is $843.2 million. The General Fund Operating Budget represents those monies raised by City taxes and charges. The All Funds Operating Budget includes grants and transfers from other levels of government. Jinks’ proposed General Fund Operating Budget increased by 3.5%.
The Capital Improvement Program Budget took a much larger climb upwards. The ten-year proposed CIP for 2018-2027 is $2.001 billion versus last year’s 2017-2026 CIP of $1.672 billion. This is an increase of 19.7%.
The bulk of the General Fund Operating Budget increase will be funded by a 2.7 cent rise in the real property tax rate which, along with the appreciation of the City’s real property tax base, will generate about $21.4 million not counting the extra monies collected for the proposed 2.7 cent increase in June of 2017 that will flow into the FY2017 budget
The reasons given for the increase mirror those we wrote about last week in our editorial on the lack of growth in the real property tax base. More students in the schools, the need to deal with sewers, the need to deal with Metro and the need to deal with basic City infrastructure headline the list. While there is some growth in a few City departments, most have budgets that are level.
If the budget is adopted as proposed, Alexandrians will be hit with almost six cents of increases in the real property tax rate in a mere two years, a rate of increase that has not been seen for years. Alexandrians will also be hit with a separate fee for dealing with the storm water runoff issues and those who live in the Potomac Yard Metro Station zone will have the surtax to pay for the new station. All Alexandrians who use City trash and recycling services will also see a fee increase.
Since the outlook for the future is not much brighter, it appears that Alexandrians can expect to see a never ending and escalating increase in their City taxes and fees. Is there any hope? During the last Council election there was widespread agreement that the City had to find new sources of revenue to relieve pressure on property owners. Unfortunately Council has failed to find sources of revenue despite the rhetoric and is finding the sources of revenue by the tried and true method of taxing Alexandrians more. In truth there is no magic bullet for finding additional revenue sources.
If each dollar of revenue is precious, then we might expect to see a more aggressive attempt to control the costs of government. The police are getting a million more dollars to hire more officers but there are those in the City who would like to see an analysis of how our police department’s staffing stacks up against like cities and counties in our Metro area.
The fire department budget is going up by $2 million. Even though the fire department’s traditional staffing seems to serve the City well, a previous chief obtained a commitment from the previous City Manager when times were better to increase it. We have seen no evidence that all this additional manpower has made any difference. In fact, the disruption to the Department caused by the dual Fire Medic Program has been responsible for many retirements and resignations as noted by the City Manager. This has made it very difficult to keep equipment in service without massive numbers of rehires of personnel who should be resting. They soon become disgruntled and resign compounding the problem. Instead of throwing more millions we do not have at this problem it would be prudent to study the fire department objectively.
There is one area that the City Manager alluded to that could bring some relief to taxpayers. The City works very hard to maintain its AAA Bond rating. In fact it works so hard at it that it has set its cap on issuing debt at the very lowest end. Other jurisdictions similar to Alexandria maintain their AAA rating with a significantly higher cap. The Manager has called for Council to discuss this starting next week and it is of critical importance.
If the City can’t issue bonds, then it must fund its CIP with so called “cash capital” which is just taxing the citizens more. It is unfair as these long term improvements are enjoyed by citizens for many decades. Bond funding spreads the cost over 20 or 25 years. Using property taxes takes all the money up front meaning those who are here now pay it all while those who come in a few years get a free ride. It appears critical to fund sewers, Metro and the schools capital projects to have more bonding authority. It might also mean that the cash capital could be reduced which could help cushion the future tax increases that are coming. For FY2018 cash capital is set at $26.7 million which is close to eight cents on the property tax rate.
The budget season will be long and complicated. The Manager did not give the schools all the money that the Superintendent requested and parents are already organizing to bring pressure to increase the tax rate to provide full funding. We did notice that in the current year budget the Superintendent and his School Board found a spare $15 million to acquire an office building for conversion into school space. If this year’s budget had that much spare cash floating around it makes one wonder how much “float” the proposed 2018 Schools budget has?
We encourage our readers to follow and to become involved in the budget debate. If every dollar is precious then every Alexandrian must be involved.