City council: No real estate tax hike in 2014

City council: No real estate tax hike in 2014

By Derrick Perkins (File photo)

As city officials prepare next year’s budget, they will do so without the possibility of raising real estate and personal property taxes.

That was the decision of the Alexandria City Council last week, when it kicked off budget season by presenting its guidelines to City Manager Rashad Young. The unanimous agreement came just more than six months after city councilors approved a major real estate tax hike.

“I’m appreciative that [Young] is willing to accept that rather tight restraint of no increase in the real estate tax rate,” said City Councilor Tim Lovain. “We had a significant increase last year, and I think it was made necessary by the very strong capital needs that we have, but that rate is now in place and the additional funds that we were able to raise … [are] just as available to us this year.”

The $628.4 million budget for this fiscal year — approved in May — included a 4-cent tax hike, bringing the rate up to $1.038 for every $100 of a property’s assessed value. Though less than the 5.5-cent increase initially considered, it still left the average homeowner paying an extra $314 annually.

But the resolution adopted by city council gives Young and his staff leeway in other areas, like “changes to other tax policies, tax rates, tax designations, fees, fines and service charges that are equitable, fair and administratively feasible.”

City councilors also asked Young to keep funding for Alexandria City Public Schools steady if possible next year. The district crafts its budget independently, but City Hall foots the bill.

Though local property owners might want to celebrate, city councilors warned of hard decisions to come.

“I think we just have to be prepared for some tough tradeoffs because of that [tax rate] constraint and because the revenue estimates aren’t looking very strong,” Lovain said.

City Councilor Justin Wilson said the information he reviewed indicated a downturn in consumption-based levies, like the hotel and sales tax. While budget officials believe income from real estate taxes will increase, it’s a small boost, he said.

“We have received revenue estimates for next year, and while I think they will probably change … they make one thing pretty clear, which is any hope that we were going to be immune to the effects of sequester are very much dashed,” he said.

Officials also tweaked the budget approval process, adding a 48-hour window between the final add/delete session — the last round of horse-trading — and the fiscal roadmap’s adoption.

A minor controversy during May’s budget approval sparked the change. Several city councilors realized too late that the roadmap eliminated set-asides for affordable housing and open space funds.

While the dedicated revenue stream to the affordable housing fund subsequently was restored, the debate over when the set-asides were axed and who knew about it led to calls for reform.

City Councilor Paul Smedberg joined his colleagues in voting for the change, but not before warning that the extra time was for review and double-checking — not last-minute negotiating.

“This is not another 48-hour window for people to lobby us to make further changes to the budget,” he said.