County deficit ‘is getting worse’
Albemarle County faces even worse financial troubles than officials anticipated only weeks ago.
A projection released Wednesday puts the county’s budget shortfall at $5.7 million, $1 million worse than October projections.
“Every single revision we’ve had … the picture is getting worse,” Board of Supervisors Chairman David L. Slutzky said.
At Wednesday’s board meeting, Slutzky recognized the “unprecedented” economic downfall but added that the county should revisit how it calculates financial projections, considering that officials’ projections have been quick to change for the worse.
Supervisor Dennis S. Rooker said it’s difficult to develop sound financial projections because the economy is so volatile, adding that supervisors should consider setting aside a larger reserve contingency fund to prepare for future woes.
“It seems to me that we need to perhaps have the discipline to build in a bigger contingency,” Rooker said.
Richard Wiggans, the county’s finance director, said the county is seeing continued declines in sales and real estate tax revenue and said that though county staff has made conservative revenue projections, the procedure for calculating financial forecasts would be re-evaluated.
To deal with revenue reductions during the next five fiscal years, officials are considering axing funding for recycling and affordable housing, as well a program designed to secure conservation easements, among many other ideas.
Not only that, the county plans to freeze 65 county employee positions.
Even if the county raises the real-estate tax rate to 77.2 cents per $100 of assessed value for the next five years, the county might have to practically eliminate any new infrastructure projects during the five-year period — in addition to millions of dollars of other budget cuts — just to fund existing infrastructure projects, according to Assistant County Executive Tom Foley.
The only likely scenario in which the county could afford new infrastructure projects is if it receives state or federal grants, Foley said.
The proposed 77.2-cent tax rate would mean the average homeowner would pay the same real-estate taxes as this year for the next two years, officials say. Assuming real-estate values begin to pick up, there would be a slight increase in tax bills in the third and fourth years, maxing out at a 3 percent increase in real-estate taxes five years from now, officials project.
The board is only a couple months from a political makeover, as two new Republicans won seats in Tuesday elections. Slutzky, a Democrat, lost his Rio District seat to Republican Rodney S. Thomas, and Republican Duane Snow won the Samuel Miller seat held by independent Sally H. Thomas, who is retiring.
A few times during Wednesday’s meeting, supervisors referenced a “change” in direction likely to occur on the board, and some questioned how the incoming Republicans will be able to make ends meet under their plans to cut funding.
During a briefing in which a JAUNT representative explained the local bus system’s increase in passengers, Sally Thomas asked what would happen if JAUNT faced a 20 percent funding decrease, to which the representative said many routes would be eliminated. Thomas was referencing Snow’s campaign guarantee that the county would be able to enact 15 percent to 20 percent funding cuts for departments using a zero-based budgeting system in which the budget is virtually created from scratch.
Snow, however, had clarified his guarantee on the campaign trails, explaining that the 15 percent to 20 percent funding cuts from wastes could only be found at some departments.
At times, some supervisors showed reluctance to make financial plans, explaining that the new supervisors might have dramatically different plans.
Reader Reactions
Stamford: A good point. However, the county gets most of its revenue from property taxes. A VAT is not a solution for our current local problem. Sticking to the article’s theme, should the county raise property taxes to be able to provide the services county residents need and want, or should the county residents figure out which services they can do without and keep their low taxes? This is the question.
The real theme of the discussion is to debate whether government can offer solutions. Progressives affirm while conservatives deny. If we are looking for a really simple solution to a complex problem, try the VAT. Cutting services will only hurt those people who need them the most, the working poor.
What is the matter with you people? The article is about a real choice that county residents need to make, fewer county services or higher taxes. It’s really simple. The viability of Social Security has nothing to do with our county government paying its bills. Please contribute something useful, ways the county could cut spending, or the amount you wouldn’t mind your taxes being raised. That would be a worthwhile discussion
Wow Stamford…thanks, I stand corrected. I hope all that becomes reality, it certainly would not hurt my retirement plan any.
Information from the CBO and the SSA states that in each year since 1982, OASDI tax receipts, interest payments and other income have exceeded benefit payments and other expenditures, most recently (in 2004) by more than $150 billion. As the “baby boomers” move out of the work force and into retirement, however, it is anticipated that expenses will come to exceed Social Security tax revenues in 2010 and 2011, and then briefly regaining some solvency in 2012 until plunging into permanent cash-flow negative operations from 2016 onward.
According to most projections, the Social Security trust fund will begin drawing on its Treasury Notes toward the end of the next decade (around 2018 or 2019), at which time the repayment of these notes will have to be financed from the general fund. At some time thereafter, variously estimated as 2041 (by the Social Security Administration) or 2052 (by the Congressional Budget Office), the Social Security Trust Fund will have exhausted the claim on general revenues that had been built up during the years of surplus. At that point, current Social Security tax receipts would be sufficient to fund 74% or 78% of the promised benefits, according to the two respective projections. The Social Security Trustees suggest that either the payroll tax could increase to 16.41 percent in 2041 and steadily increased to 17.60 percent in 2081 or a cut in benefits by 25 percent in 2041 and steadily increased to an overall cut of 30 percent in 2081.
Stamford,
Could you come up with something more substancial than a poll conducted by the times? That is opinion your talking about, right?
Sry D, SWAM, “Small, Woman and Minority” owned. So you have to be small (I certainly qualify for that) but a majority percentage of your business has to be owned by a woman or minority. Being a white male, I’m not in the minority.
I agree, we need the essential government programs. No argument there.
As far as your buddy taking advantage of the tax laws, well, thats what he is doing, taking advantage. I like to sleep at night, so I play by the rules.
Ok, I’ll read that article…thanks.
Foehammer, I don’t know what a SWAM is…..but whatever.
My point – related to government – is that there are building codes, by necessity (they even knew this in the time of Hammurabi). Government (i.e. laws, codes) dictates how concrete is to be made and poured, right?
Someone has to determine how roads and bridges, for example, are built….and government usually relies on “experts” like engineers and their professional societies to determine the specs. See what I mean.
I used to know a guy who ran a consulting business. His car – his personal car – was purchased by the business. So to his phone. Many of his meals were “business” meals. Some of his golfing vacations were “business.“ He gamed the system because in his words, he was “entitled.“
I now what you mean about the pork and I do not disagree. Congress makes the military buy weapons and supplies it doesn’t want because the businesses who make them are spread in so many states and districts. Some of the very worst offenders are also those who rant most vociferously about the evils of “big government.“
Read the Taibbi article. It’s worth the time.
Social Security is fully funded through 2041 and it is not “broke.“ According to a poll conducted by the New York Times and CBS in 2005, only 15 percent of 1,111 respondents said they considered Social Security to be in crisis.
Stamford, sry, your right in the fact that was a well intentioned program, and all of us that work and pay taxes contribute. But there is a slim chance that you will ever get back what you put in. It has turned into a ponzi scheme. We are paying for those presently retired. Our kids will be paying for us. Their kids for them..
What I am saying is that government management has bankrupted SS. If you were to take all you have contributed to SS over the years and invested it, or even just saved it, you would be in pretty good shape. I do enjoy discussion with you and D-mocracy, I appreciate your words and the fact that we dont insult each other like some people do on this board. Thanks for reading.
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