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Budget plan slashes spending, taxes
Services are being cut but so are taxes in Prince William's proposed budget plan for the coming year. On Tuesday, County Executive Craig Gerhart formally introduced a spending proposal that would lower the average homeowner's tax bill by 16 percent or $548.
Officials had already announced their intentions to cut tax bills but Tuesday was the first time the budget – with it's lower tax bills and services cuts – was formalized.
The proposed tax rate, $1.198 per $100 of assessed value, will result in lower taxes for homeowners but higher taxes for business owners because state law does not allow for separate tax rates for commercial and residential. While the residential market has been dropping, the commercial market has been increasing so assessments for businesses are up, meaning their tax bills will be also. Under the budget plan, the average business will pay 5 percent more in taxes in the coming year.
But in order to keep tax bills for homeowners and businesses that low, the county will have to cut its budget by about 6 percent and for the next few years, there will be almost no new spending or services, Gerhart said.
But by 2013, he added, there will be “a little bit of a glimmer at the end of the tunnel” as the housing market will likely level off enough that officials can begin “some small amount of reinvestment in our community.”
In the meantime, however, every department is facing cuts.
Under the budget proposal, there will be no salary increases for employees and the county will scale back its contributions to the employee retirement plan. There will also be no signing bonuses for new police, fire or rescue workers.
All libraries will remain open but the neighborhood libraries will cut back their hours to 40 per week. Cuts will also be made to the Cooperative Extension, although the nutrition and 4-H program will remain intact. In addition, the county's Office on Youth will be eliminated.
Altogether, the county will cut $17.2 million from general government, community development, human services and public safety.
“We're even looking at our telephone bills,” Gerhart said.
But on the upside, he added, the New Horizons, Meals On Wheels and Senior Center programs will not be cut.
Supervisors said little during the budget presentation but it appears that at the next meeting, on March 3, they will be divided over the tax rate.
Once the tax rate is advertised, it can be lowered, but not raised. So if the rate is advertised higher than the proposed $1.198, supervisors have some wiggle room if they want to add specific programs or services back in. If it is advertised at $1.198, they have no options for increasing their revenue.
Neabsco Supervisor John Jenkins (D) indicated he'll push for a higher advertised rate when the board takes up that issue on March 3.
“I hope it's high enough to give us some latitude,” he said, arguing that it can always be lowered later on.
But Chairman Corey Stewart (R) is against that idea. He pointed out that if the board sets a higher tax rate, they'll end up debating how much money to spend. By setting a lower tax rate, they already know how much they'll have to spend and the debate will be over how to spend it. That's a more fiscally conservative position, he said.
After the March 3 vote on the advertised rate, the board will continue to negotiate on the details of the spending plan and will hold public hearings on April 6 and April 9. The budget and tax rate will be formally adopted on April 28.
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