The City of Fairfax’s real estate tax rate took a nose-dive at the City Council’s budget approval Tuesday, April 4. The council balanced the fiscal year 2006-2007 budget and set next year’s property tax rate of 71 cents per $100 of assessed value, three cents lower than the staff’s proposed rate and 10 cents lower than the current rate of 81 cents.
Over the last several weeks’ worth of budget deliberations, the council tinkered with the staff’s original presentation. At the beginning of Tuesday’s meeting, the budget was balanced at a property tax rate of 71.5 cents, which city staff and the council lowered after a reexamination of the city’s marketing program and reallocating money for a number of next year’s capital improvement projects. The city’s final budget ended at $118 million.
The city’s marketing program, implemented when the city created a marketing position in its 2005-06 budget, was originally designated to receive $250,000 this year. At a budget meeting last week, the council cut $35,000 from the marketing fund, and Tuesday, Councilmember Jeff Greenfield suggested taking out another $15,000.
"We are on the verge of huge economic changes here," said Councilmember Joan Cross. "If there is ever a time to market the city to the limit we can possibly afford, it is now." Things like the Old Town Village project downtown as well as the redevelopment of the Fairfax Boulevard corridor require the city to keep its residents and Fairfax County neighbors informed, she said.
Councilmember Scott Silverthorne wondered if instead of using taxpayer dollars, a portion of the Business Improvement District tax, a 6-cent tax generated from businesses along the Fairfax Boulevard corridor, could be allocated to the city’s marketing program.
Greenfield agreed. "There are different types of money out there that still accomplish some goal," he said.
Using BID money becomes a complex process, said Cross, because the council would have to go through the BID board of directors. "I think that will be a little bit cumbersome," she said.
The council voted 4-2 to cut the $15,000 from the marketing program, with "no" votes from Silverthorne and Cross.
THE CITY’S FUND balance, used as a rainy day fund, has grown in the last decade, to about $12 million, said Silverthorne, who wondered if the council could use some of this year’s rainy day dollars to knock some capital improvement projects out of next year’s budget and thereby reduce the real estate tax rate by another half cent.
"We’ve had some rainy days and never tapped it," he said.
Taking the tax rate down by a half cent cuts about $400,000 from the city’s revenues, said city manager Bob Sisson. The council voted unanimously to reallocate $430,000 worth of the 2005-06 prefund balance to capital improvement projects. City staff does not know what projects these will be yet, said assistant city manager David Hodgkins, but will introduce appropriations legislation over the next few months detailing the projects.
The tax rate is not the most important number in this budget, said Mayor Rob Lederer. "The amount of tax rate reduction is not the important barometer," he said. "The important barometer is the cost to the homeowner."
According to Hodgkins, the new tax rate of 71 cents increases the average homeowner’s property tax by 1 percent over last year.
However, residents such as Richard Tammaro feared that although the average homeowner’s tax payment may only increase 1 percent, not all homeowners have seen average assessment increases. The average assessment increase in the City of Fairfax this year was 21 percent, said Tammaro, who lives in the Fairview neighborhood between Daniels Run Park and Main Street. However, he said, his own property value shot up from about $330,000 to about $460,000 this year.
"I love living in this neighborhood, but my assessment went up 40 percent," said Tammaro. "I realize it’s a fact of life, but it’s getting harder and harder for me to afford necessities for my family with the tax rate going up every year."