Saturday, March 6, 2010

FY11 Budget Final Stretch

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Everything before today was just the warm-up. Now the real budget process starts. Having listened to the presentations and the speakers, read the documents and asked the questions, the Board of Supervisors begins to decide Loudoun's future... taxes, libraries, deputies, roads, courts, family services and of course... schools.

The School Board has asked for an budget increase of $32.1M, almost exactly the cost of increased enrollment ($21.7M) and increased non-discretionary costs ($10.1M). We approved some expenditure increases but offset them with other cuts. There was a small increase in state funding, a small decrease in federal funding and a larger decrease in expenses required by the state. It all added up to a need for an increase of $25.1M from local taxes (the same percentage increase as was proposed for the rest of the County government).

On Tuesday the Supervisors and the School Board met for about three hours to discuss the school budget. At the beginning of the meeting we received a budget update, and the outlook is much better than we anticipated even just a month ago. Let me give you a picture of what this means for schools.

This chart shows the $1.3M increase in education funding originally proposed by the state as a result of the LCI freeze. It shows the $25.1M requested by the School Board in local funding to make up for the loss of state funds that the freeze would have meant, and it shows the combined state revenue increases and expenditure decreases proposed by the Virginia House and Senate, respectively.

The House proposes an increase of $17M in state aid for education to Loudoun, the Senate proposes an increase of $25M. In addition, the House and Senate both propose a change in retirement account contributions that would save Loudoun $20M in expenditures. In all, the House version would save Loudoun approximately $37M and the Senate version would save $45M.

The bottom line is that if either the House or Senate versions are agreed upon, or something in between, Loudoun will receive an increase in education funding from the state greater than the School Board's request for a local funding increase.

Translation: The school budget could be fully funded without increasing taxes locally.

It's important not to get too fixated on the state revenue numbers at this stage. They are not final but they are the best indicators we have of where we'll wind up, and we're very pleased to see them.
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9 comments:

  1. While I fully understand that there are individual instances of people losing jobs and homes, and while we all empathize with these situations, the BOS looks at the county as a whole, and when you look at Loudoun County as a whole, you see prosperity:
    http://tinyurl.com/ybuhqy7
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  2. In my neighborhood, assessments were up 10 percent (sometimes more) this year so I'm skeptical that the tax rate needs to be increased to $1.40.
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  3. My assessment went up 5% but, at $1.40, my taxes will go up over $900, which is a 19% increase over last year. I just want our elected officials to be fiscally responsible with the money they have already been given and make good, smart decisions regarding the use of that money. When that happens, I don't complain. Problem is, I don't see that happening. Our elected officials (both Supervisors and School Board) seem to be afraid to make tough choices (cutting pet project programs, etc). Instead, they cut unfunded positions, reduce pay and benefits and other, not so great things, seemingly to avoid any confrontations with angry constituents because you just can't make everyone happy all the time. If they would just cut unnecessary programs and not make ridiculous purchases, I think we'd be doing just fine.
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  4. I hate comments where people rail against "unnessary programs" and "pet projects" with identifying anything. While there is some inefficienctcy inherent in any large organization (including every Fortune 500 company), governments are more closely scrutinized than most. What one person considers a "pet project" is to another person a "long overdue initiative". Both the school board and BoS were elected for their positions by a broad range of people. It should be their duty to give people what they wanted and not listen to extremists (on both ends of the spectrum) who care only about a narrow agenda.

    Regarding real estate prices, the current situation of some home values going up (or down) more than others should cause our elected leaders to consider revenue sources which are not tied to real estate taxes. While I believe taxes should only be raised as a last resort, we may be at that point in order to sustain the quality of life we all want in Loudoun county. If that's the case, the tax increase should be as broad as possible and not "punish" those who are lucky enough to live in a surging neighborhood.
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  5. At $1.40, I'm looking at almost a $1500 tax increase. That's money I won't have to spend at local businesses. And yet supervisors couldn't increase the tax rate on private aircraft by even a penny.
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  6. Yes, our board members were elected to represent a broad range of people, it doesn't mean that they should fund every "initiative" that any of their constituents want. They need to make some tough unpopular decisions.
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  7. "Translation: The school budget could be fully funded without increasing taxes locally."

    Say what? If a penny on the tax rate = $7.5 million, then an increase of $32 million in funding would lower the tax rate by about 4 cents to $1.36, which is still above the equalized rate of $1.27 and would represent a 7% tax increase for the average homeowner. Totally unacceptable!
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  8. This economy is here to stay for a few more years so what is the plan for next year and the year after? The belt needs to start tightening. It's better to start cutting back now and give Loudoun taxpayers a break this year. The tax rate is the highest in the DC area.
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  9. Dan, where did you get the idea governments are more scrutinized than businesses? Businesses put out P&L statements, which are examined by banks, investors and financial experts..as well as a board of directors which make sure waste is indentified. Governments are scrutinized by what? Reporters? But if you want unnecessary spending, switch all 12-month employees in the school system to 11-months, saving millions. There's no school during the summer, and employees seem to cover for each other during those months so that they get paid for 12 months, but work halftime during the summer. Conversely, a business would shut everything down for a month, save electricity, salaries, etc. and only keep essential personnel working. Don't believe me? Go into a school on a Friday during the summer at 3 p.m. Tell me how many people took care of you....
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