Council: New budget could mean new taxes

Council: New budget could mean new taxes
File Photo

By Erich Wagner (File photo)

Local leaders are warning residents that another year of property tax hikes could be just around the corner.

City councilors approved the annual budget guidance — a general spending roadmap for city staff as they craft the budget — last week, and in a 4 to 3 vote, gave City Manager Rashad Young leeway to raise taxes to make ends meet.

Young said Alexandria will face a $16 million deficit just to keep the municipality running at fiscal 2015 levels. And that doesn’t include new city council priorities for fiscal 2016, like paying for enrollment increases in Alexandria City Public Schools and looking at ways to make public employee compensation more competitive with neighboring jurisdictions.

Last year, councilors vowed not to raise taxes, in light of a 4-cent increase in 2013, but advertised a half-cent hike out of an abundance of caution. But in the end, with revenues only growing by a projected 1.56 percent, lawmakers approved the tax increase in a last-minute effort to balance the budget.

City Councilor Justin Wilson said Young’s proposed 2016 budget, which will come out early next year, should not include any tax or fee increases. That way, residents can see just how deeply a flat budget would hurt city services.

“Regardless of whether you believe we need to raise the tax rate or not, we should ask the manager to prepare a budget which does not raise the tax rates,” Wilson said. “If council does decide to raise the tax rate, this gives us the best opportunity to explain that action at that time. We’ll have that budget that does not do so, and that allows us to explain to the community why it would be needed.”

But City Councilor Del Pepper countered that such a move could be seen as indecision and a lack in willingness to remain competitive, in the eyes of city employees. She pointed to a number of instances in the last year where longtime city leaders retired or took jobs with other jurisdictions.

“By [only raising taxes by a half cent], it required us to cut programs and a number of projects and staff,” she said. “And of those who weren’t cut, some left, and I think that was partially responsible for the ‘brain drain’ that occurred. I just don’t want to see that happening again.”

Starting without a tax increase will encourage city leaders to be more frugal, said City Councilor Tim Lovain.

“The proposed budget should be a stretch budget; it should challenge us,” he said. “I’m afraid that, without it, the rest of the budget guidance, from spending more on compensation to business tax cuts, will just drive us toward a significant tax increase, and I don’t think the citizens want that.

“I think it’s good to be able to say: ‘If you want a budget with no increases, this is what it would look like.’ I think there’s great value to that.”

Vice Mayor Allison Silberberg said, given how difficult last year’s budget process was — with no tax hikes on the table until the end — she was in favor of giving Young some leeway.

“I’d rather you didn’t come in with a tax rate increase,” she told staff. “But I do think some flexibility is called for.”

But Wilson said that allowing for tax increases in the budget proposal all but guarantees taxes will increase come July — unless councilors pull them back.

“Let me be crystal clear: If we support [flexibility on taxes], the manager’s going to come in with a tax rate increase,” he said. “So let there be no doubt. We can state orally all we want that we don’t want him to do so, but I can guarantee there will be a rate increase in that proposed budget.”

“That’s just your supposition,” Silberberg said.

“Yeah, it is,” Wilson said. “But if you want to bet some money on it, we can.”