Real Estate Assessments Rise, Tax Rates Down?

Real Estate Assessments Rise, Tax Rates Down?

City Council hears revenue and spending projections and next year’s economic outlook

The Alexandria City Council held its annual retreat on Nov. 20 and discussed next year’s fiscal outlook for the city.

“Our revenues from a variety of sources are going to continue to increase,” said Mayor William D. Euille. “That’s good. However, our government spending is also continuing to grow at between six and seven percent a year and that’s if we simply maintain programs at their current levels and don’t support any new initiatives. We have to find a way to control these costs.”

Residential real estate assessments are projected to rise again this year, between 15 and 20 percent. “This looks very much like it looked in the 1980s, and that means that within the next two to three years, we are going to see these assessments begin to decline,” Euille said.

To balance the effect of these assessment increases, Euille plans to propose lowering the tax rate once again. “Last year we lowered it by four cents,” he said. “I think we will do at least this much and maybe more. We have to look at the budget and make a definite determination at that time. However, the sense of council is that we are committed to lowering the rate. We will decide how much later.”

Hotel occupancy rates are going up, for the first time better than before 9/11. Meal taxes are also projected to increase. “This means that we will have additional revenue streams to support our operating costs and particularly our capital improvement projects,” Euille said.

AS TO GOVERNMENT spending, the largest portion of the operating budget is personnel, particularly health insurance and retirement. “We are going to take a hard look at all of our government costs,” said Councilman Rob Krupicka. “That is one of the reasons that we are putting together budget and efficiency audits for every department. We need to look at where we can reduce costs without reducing the level of services that we provide to our city residents.”

That continued growth concerns everyone on the council. “Six to seven percent growth every year while simply maintaining current program levels is not good,” said vice Mayor Redella S. “Del” Pepper. “Our health insurance costs are just getting higher and higher, like everyone’s. I’m not sure what we do about this but we certainly have to look at it very carefully.”

Council also took a look at economic development. “There are several agencies that are involved in economic development activities,” Krupicka said. “We are providing funding to several of them. We have to get a handle on what everyone is doing and make some decisions about how we can accomplish economic development more efficiently.”

Pepper agreed. “I would like to see us all come together in another retreat with all of the organizations that are involved in economic development in the city and just take a really good look at what everyone is doing and how they are all working together,” she said.

THE CITY FUNDS the Alexandria Convention and Visitors Association, the Alexandria Economic Development Partnership, the Eisenhower Partnership and the Small Business Development Center. “I think we have to identify what everyone is doing and identify one point of contact among our staff and see how we can make our economic development function more efficient,” Euille said. “The staff is supposed to get back to us with some dates for a retreat or summit so that we can discuss these matters.”

All in all, this year’s retreat was useful. “Last year we did visioning and developed our strategic plan,” said Councilman Paul Smedberg. “Those were very important and we accomplished a lot. The strategic plan is a living document that we can keep using. This year’s retreat focused on specific issues. Our discussions on revenue and spending and economic development were very good and I think we have some idea of where we are headed for next year.”