FY2020 budget passes without tax rate hike

(Graph: City of Alexandria)

By Missy Schrott | mschrott@alextimes.com

Council unanimously adopted the fiscal year 2020 operating budget on May 1, maintaining the real estate tax rate for the second year in a row.

This year’s general fund budget, which is composed of funds from local property taxes and other local taxes, fees and fines, is $761,542,268. This is an increase of 1.75 percent, or $13,115,332, over FY2019.

This is the second year in a row council has voted to maintain the real estate tax rate at $1.13 per $100 of assessed value. Council voted in March to advertise the maximum real estate tax rate at $1.135, but the budget council adopted does not increase the rate.

(Graph: City of Alexandria)

(Our View: A good budget)

While the tax rate remains steady, there is an increase in property tax revenue year over year because property values rose. Revenue from property taxes increased from a projected $450.2 million in FY2019 to the approved $462.8 million in FY2020, an increase of about $12.6 million. Because of this increase, the average resident will have a higher property tax bill this year.

The average residential property in Alexandria, including single family homes and condominiums, was valued at $555,002 as of Jan. 1, 2019, according to the city. With the $1.13 per $100 of assessed value tax rate, the average resident’s property tax bill is $6,272. Last year, the average residential property was valued at $544,601, and the average tax bill was $6,154. Therefore, the average taxpayer’s property tax bill this year increased by $118, or 1.9 percent.

Of the available new revenue in City Manager Mark Jinks’ $761.5 million operating budget, Jinks proposed allocating two-thirds to Alexandria City Public Schools, and the remaining third to the needs of the Washington Metropolitan Area Transit Authority, according to a news release from Mayor Justin Wilson. The remaining city operations are growing .6 percent in the proposed budget, according to the release.

(City manager proposes FY2020 budget)

In his proposed budget, Jinks recommended fully funding Superintendent Gregory Hutchings’ request for Alexandria City Public Schools. After allocating an additional $77,605 to ACPS during add/deletes, the budget council adopted includes $231.7 million in operating funds for ACPS, a 3.5 percent increase over FY2019 funding.

At the budget adoption meeting, council also approved the 10-year capital improvement program for FY2020 to FY2029. Jinks’ CIP includes $1.62 billion of capital investment over the next 10 years, including $478 million for school facilities, $380 million for transportation and $150 million for city municipal facilities, according to Wilson’s news release.

The budget adoption on May 1 marked the end of a months-long process for the majority-new council, which includes newcomers Canek Aguirre, Vice Mayor Elizabeth Bennett-Parker, Amy Jackson and Mo Seifeldein. Wilson commended the work of his colleagues.

“This process is always a difficult one and I think everyone rose to the occasion,” Wilson said at the budget adoption meeting. “I know for four of us, this was a very new process and new decision, but you guys made it look natural. … For me, every budget has a story, and this one, I have to say, was relatively drama-free.”

After Jinks proposed the FY2020 operating budget and FY2020 to FY2029 CIP in February, council held a series of work sessions, public hearings and add/delete sessions.

After the final add/delete session on April 29, the general fund expenditures increased by about half a million dollars, from Jinks’ proposed $761,050,196 to the adopted $761,542,268.

(Final add/delete session results in no tax rate hike)

The increase was primarily due to revenue re-estimates, a prisoner agreement from the U.S. District Court of D.C. and the residential refuse collection fee. Because of the increase, council was able to allocate the additional funding for ACPS, as well as funding for early childhood capacity expansion, start-up costs for a Commercial Property Assessed Clean Energy program and SNAP outreach, among others. Council also approved the necessary local match if a federal grant is funded to increase firefighter staffing, according to a news release.

Outside of the add/deletes, Jinks’ budget continues Alexandria’s progress as a “smart, green and equitable city,” according to a news release. Highlights of those pillars include funding for a new customer service system called Alex311, which would replace the Call.Click.Connect system; funding for major improvements to the city’s municipal vehicle fleet and for the purchase of only hybrid and electric vehicles; and funding to establish a new racial and social equity officer in the city manager’s office. The adopted budget also increases funding for affordable housing programs from $5 million to $6 million per year, according to a news release.

Other significant changes include increases in personal property taxes and recycling fees.

The vehicle personal property tax will increase from $5 per $100 of assessed value to $5.33, according to a news release. However, the increase is in conjunction with the elimination of the $33 annual vehicle decal fee and will result in no change to the total amount of city revenue generated by the tax.

The annual fee for residents who receive city refuse and recycling collection will increase by $38 or 10.2 percent, from $373 to $411, according to the release. The increase is due to rising contractor costs and the impact of China’s new recycling processing standards, according to the release. Five dollars of the annual fee hike will be used to fund WasteSmart initiatives.

“The reality is, 70 percent of our approved budget that we just approved is schools, public safety, transportation and capital,” Wilson said at the budget adoption meeting. “… A big chunk of our budget is tied to these core, critical services, and I think this is a core-services budget, one that invests in those core services, but it’s also one that I think looks to the future.”

FY2020 begins on July 1, 2019 and ends on June 30, 2020. For more details, visit www.alexandriava.gov/ budget

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