Federal shrinkage would exacerbate budget shortfall

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Without raising taxes, Alexandria would see a shortfall of about $14 million, officials announced during meetings for the 2012-2013 budget year this week at City Hall.

On top of that, national conversations about the federal government’s size and scope have City Hall sitting on shaky economic ground.

“Unfortunately, this uncertainty has a significant potential to grow, not abate,” said Elliot Branch, co-chair of the city’s Budget and Fiscal Affairs Committee, at a public hearing on the budget Saturday. “And moreover, due to our role in the economic ecosystem that is the national capital region, the outcome of the national debate on both the role and the size of the national government is sure to have an impact on the city’s economic growth, which in term drives our ability as a local government to provide services and infrastructure.”

The city’s long-term planning has helped weather the 2008 recession, insulating Alexandria from many of the problems faced by other localities across the country.

But two or three years out, the city’s fiscal health could be in jeopardy if City Hall doesn’t heed economic indicators, Branch said. A smaller government would mean less federal contracts for the city and fewer new residents flocking to the D.C. suburbs.

Fiscal restraint “is something we will be doing — not considering, but doing” this budget season, Mayor Bill Euille said.

A healthy local economy will hinge on several factors, but more “development and integration” with the public school system’s budget — perennially the largest beneficiary of taxpayer dollars — will be crucial, Branch said.

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