Budget bummer: Albemarle boosts tax rate while treading water

County Executive Tom Foley, who recently announced his resignation, will not be around to see the project through. File photo County Executive Tom Foley, who recently announced his resignation, will not be around to see the project through. File photo

“We can’t tax our way out of this,” said Albemarle County Executive Tom Foley—while proposing a 2.5-cent property tax hike in the fiscal year 2017 budget he submitted to the Board of Supervisors February 19. Even worse, he says, that increase barely maintains existing services, and he predicts another will be needed next year.

The culprits for the county’s grim economic outlook: a sluggish housing market and a growing service-demanding population, according to Foley. However, a former supe suggests the problem may lie with the board itself.

Foley’s proposed $375.2 million budget, barely .1 percent more than last year’s, suffers from a lag in the county’s largest source of revenue, property taxes, which make up about 60 percent of Albemarle’s income.

While there has been recovery from the housing bubble crash, county property assessments fell short of projected 2.25 percent increases, rising only 1.84 percent, he says.

The proposed tax hike would put the rate at 84.4 cents per $100 of assessed value. The tax  rate has increased 7.7 cents over the past four years to support essential services, according to Foley. “We are struggling to keep up with existing levels of services,” he says.

The budget includes no new positions, expands no existing services and offers no new programs, he says, comparing it to the recession gloom of 2009.

At the same time revenue is stagnant, the county is looking at a significant increase in mandates, he says. The Children’s Services Act eats up $1.7 million, and the county faces increases in its obligations to the Jefferson-Madison Regional Library, the Albemarle-Charlottesville Regional Jail, Jaunt and the Emergency Communications Center.

And while there will be no new hires, existing employees will get a 2 percent raise to keep them at market pay.

Holding the line on expenditures is a consistent theme throughout the budget, which, as Foley notes, makes it difficult to address Board of Supervisors’ and community aspirations.

He proposes a two-year fiscal plan starting in 2018, because the county already is facing a $3 million deficit next year. “The reality is a tax increase is going to be needed in 2018,” he says.

Other options include a $150,000 efficiency study and consolidation of services within the county and with the city.

But those alone will not free up enough resources without eliminating programs and services, he warns.

Former supervisor Ken Boyd sees the problem less in terms of reduced revenues and more a free-spending board, which added services two years ago that are now “skyrocketing,” he says. “That’s what’s driving it,” he says of the revenue dilemma.

He’s not surprised by the proposed real estate tax increase. “The county executive serves at the pleasure of the board, and we’ve got a board determined to spend a lot of taxpayer money,” he says. “They made a lot of decisions outside of the budget process,” such as adding people and capital projects.

Boyd also points out the cost of “lost opportunity,” citing last year’s decision to not expand the growth area enough to entice Deschutes Brewery, which would have brought tax revenues and jobs.

“That certainly would be better than increasing the tax rate for those on fixed incomes,” he says. “I would like to have someone stand up and say, ‘Cut expenditures rather than increase taxes.’”

The county’s first public hearing is tonight at 6pm in the County Office Building.