Oft-repeated in Falls Church is the fear that our tax rate is skyrocketing compared to other jurisdictions. Some are worried that our operating costs are out of control, and will continue spiraling. That's a scary narrative. To find out the facts, I reviewed the history of the tax rate over the past eight years, and was pleasantly surprised to discover that this narrative is not true.
True: The tax rate in Falls Church of 1.33 per $100 of assessed value is higher than our neighbors in Arlington & Fairfax.
Not true: The tax rate has been skyrocketing in recent years. Large increases happened when we were recovering from recession and absorbing blows to the water system. The tax rate increased from 1.07 to 1.305 between 2009-2013. I'd call that skyrocketing, but since then we've regained our footing, brought in economic development and the tax rate has stabilized.
Over the past four years, the tax rate for operating expenses has been rather flat, and the increase is comparable to our neighbors. Wait, what? That can't be.
I've served on City Council for 4 years, voting on 4 budgets. In that time the tax rate has increased just 1 penny to cover operating expenses. (This past year we raised it 1.5 cents to put funds into Capital Reserve for the school project.)
2014: The tax rate was held flat at 1.305. (My first budget vote was really hard because I voted to not fully fund the School Board request, and as you can imagine, a lot of people were not happy with me.)
2015: The tax rate increased by 1 cent to 1.315.
2016: The tax rate was held flat at 1.315.
2017: The tax rate increased to 1.33, with the 1.5 cent increase going directly to capital reserves for school facilities. Operating expenses were held within organic growth.
There you have it: In the past four years, the tax rate has increased just 1 penny for operating expenses. The organic growth of revenue due to economic development and real estate assessment growth, combined with serious cost-containment on the part of the schools and general government, has covered almost all of the increased operating expenses.
Two points to consider.
1. All members of City Council, along with staff and School Board, have been part of this effort to keep operating expenses within organic growth, but the two strongest voices have been Phil Duncan and Dave Tarter. They are persistent and they continue to lead the way.
2. Those who fear that future operating expenses are not being accounted for as we lay out financial models for the cost of debt on a new high school, should take comfort in this analysis. Despite enormous challenges in the past four years, we've managed to hold operating expenses down. It is important to have dedicated people working on this day-in-day-out. Every budget year we endure a spirited community conversation and a lot of disagreement - but it appears to be working.
I submit that the community should have faith that their elected Council, in partnership with the School Board, will continue working on behalf of citizens to restrain operating expenses, with the intent of keeping that part of our tax rate in check, as we absorb the new expenses related to capital improvements at George Mason High School.