County Budget Expands by 4.95%
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County Budget Expands by 4.95%

Rising home values pay for growth in county budget.

As a first-term member of the Herndon Town Council, Harlon Reece has paid his civic dues.

He's retired from two different careers, one in the Marines and one in business, and lives on Elden Street in downtown Herndon.

In the past two years, the assessment on Reece's house has increased by 96 percent, he said. This year, the increase in his assessment amounted to $93,000, or 26 percent.

In Dranesville District, he's typical. For the third consecutive year, tax assessment notices mailed out Feb. 25 reflected double-digit increases.

In the rest of Fairfax County, it was the second year for such increases.

Like any taxpayer, Reece was not thrilled to see his assessment rise again.

“It’s shocking to me,” he said. “I have a hard time believing this house is worth [the assessed value] on the market. If it is, we are sitting on a lot of equity,” he said.

“If we were going to sell the house, I’d have a totally different feeling about it. But we want to live here,” he said.

His house in downtown Herndon was built in 1908, and Reece and his wife, Midge, have been restoring it one room at a time. Some of the rooms have not yet been renovated, he said.

But Fairfax County tax assessors use “comparable” sales in surrounding neighborhoods to arrive at the current market value of a residence. (Linked by property address at www.fairfaxcounty.gov/dta.)

“All these new houses they’re building in and around Herndon are very upscale,” said Reece. According to Fairfax County tax assessors, the value of the Reeces’ house has increased 178 percent since they bought it in 1988.

As a town councilman, Reece is preparing to run for re-election. His campaign literature, he said, will suggest that the Herndon Town Council “at least seriously consider a tax rate decrease.”

At the same time, Reece is mindful of the costs of running a police department and public works. “We’d have to approach that very carefully,” he said.

Town of Herndon residents pay taxes of 32 cents per $100 of real estate value in addition to $1.23 they pay to Fairfax County.

“Why doesn’t the county return some of that? It is, to some extent, double taxation,” Reece said.

AS THE ECONOMY gradually emerges from a mild recession, Fairfax County officials say there will be no new spending in FY 2003.

County Executive Tony Griffin last week presented an "advertised" budget for $2.46 billion that "stays the course" and proposes no new programs or major expansions in services.

Neither does it propose major cuts.

The 2003 budget anticipates revenue of $2.46 billion that includes a projected increase of $179.3 million from real estate taxes, driven by a housing market that produced a16 percent spike in the value of homes.

The population increased by 171,000 or 21 percent since 1991, Griffin said.

According to county officials, the FY 2003 budget would increase spending by 4.95 percent compared to FY 2002.

Spending in last year’s advertised budget increased by 4.93 percent over FY 2001, according to county figures.

But while Fairfax County officials say they won’t increase spending next year, they do plan to spend the increased revenue, under Griffin’s proposal.

The county expects steep drops in revenue from two major sources: the sales tax and investment income.

Even with those losses, county revenue will increase because of double-digit, market-driven increases in home values.

By comparison, budget officials expect an anemic increase of one-half of one percent from commercial real estate.

Joanne Theon, co-chair of the budget and taxation committee of the McLean Citizens Association, said her organization is concerned about the imbalance in revenue from residential and commercial real estate.

"We have been told that we need commercial development at Tysons and the Route 1 corridor," she said. "That will mean we pay less [in real estate taxes].

"But commercial real estate is down this year. They have overbuilt. They don't have full occupancy. So guess what? We are subsidizing them."

TAX ACTIVIST Arthur Purves contends Fairfax County should be spending money in direct proportion to increased population and inflation. But spending growth outpaces those figures by 124 percent, according to figures he presented last week.

He asked county officials to cut the effective tax rate on real estate by 17 cents, from $1.23 to $1.06 per $100 of value.

Last week, Prince William County Executive Craig S. Gerhart asked for a tax cut from the existing rate of $1.30 to $1.23. Teachers in Prince William would get a 7.1 percent pay raise.

Gerhart said he wants to cut the rate to $1.22 next year, and $1.21 by FY 2006.

Loudoun County’s tax rate is $1.08; in Arlington County, it is $1.023 per hundred.

The City of Alexandria is reportedly considering a cut in the real estate tax rate. If there is one, it will be announced March 12.

In Fairfax County, no programs will be expanded nor services added next year, Griffin said. But under the proposed budget, only a few have been suggested for cuts.

SINCE LAST NOVEMBER, when Griffin asked county agencies to reduce spending by five percent in anticipation of decreased revenue, the county has saved $18 million, mostly by not filling vacant positions, but that savings will not apply to the baseline of the FY 2003 budget, Griffin said.

Staffing a new police station in Sully District, scheduled to open in January, 2003, requires 25 new positions. Adding five classrooms to serve a total of 250 children in five existing School-Aged Child Care centers requires 22 more teachers.

Griffin said he trimmed the Department of Information Technology’s request for a $30 million increase next year. Instead, IT will get a $5 million decrease, he said.

In FY 2003, 51.4 percent of the county's income will be "transferred" to schools. Fairfax County Public Schools asked for an increase of $122 million. Griffin's advertised budget allows an increase of $68 million. Griffin said he is constrained by Board of Supervisors guidelines, which restrict the size of the increase. Teachers would get pay raises of 4.68 percent.

Employees in public safety agencies, schools, and the offices of the 10 county supervisors don’t participate in the county Pay for Performance program. [See related story.]

Schoolteachers and public safety employees get combined increases from Cost of Living Adjustment (COLA) adjustments and "step" increases that are built into their pay structure.

Their pay structure has also been adjusted to make it competitive in the market for employees.

Schoolteachers' salaries are included in the $1.16 billion transfer to Schools that Griffin proposes. Raises of 4.6 percent are proposed for them.

Public safety employees' raises, $7 million, and Pay for Performance, $9.9 million, are included in $21 million earmarked for compensation increases.