Chesterfield works to create solutions to budget

As Chesterfield County moves toward approval of this year’s (2014) budget, which will take place April 10, there are still some creases to iron out. The news pundits have spoken ad nauseum about the fiscal cliff and the sequester. Locally, county government is concerned about revenue and expenditures if the federal and state governments don’t get their act together.

While there are a few ways to raise revenue – real estate tax, meals tax, sales tax – the problems with revenue pales in comparison with a mounting wave of costs. Hand in hand they leave the County in a financial pickle until economic conditions stablize, leaving wiggle room for Chesterfield budget gurus.

The County is still experiencing half the growth it did between 2004 – 2008,  but real estate assessed values are close to reaching their historical trend as housing permits have begun to turn around and  unemployment rates are easing.

But real estate tax, now at 95 cents per $100 of home value, is still 7 cents below what it was during the 2004 – 2008 period on average.

“There are still a lot of risks out there that would take a fragile recovery and turn it back to a shallow or [into] another deep recession,” Assistant Budget Director for Chesterfield Matt Harris said last week during a budget and audit meeting. “We do expect to gain a little traction on the revenue side, but we’re nowhere near out of the woods.”

Challenging areas and costly expenditure pressures include the increased Chesapeake Bay standards; the Affordable Care Act; teacher retirement rate increase; school revitalization and transportation costs.

Dan Gecker, Midlothian District Supervisor, has said he may be in favor of raising the Real Estate tax and said last week that the board should advertise it at a higher rate so the Board of Supervisors has some room to negotiate the rate to balance the budget.

Dale District Supervisor, Jim Holland, said he was in favor of a restaurant meals tax. That initiative was rejected at the General Assembly. Chesterfield would have to win approval for such a tax through a voter referendum.

The school budget for fiscal year 2014 is $533.9 million. The budget includes a 2 percent increase in compensation for employees split between 1 percent in salary increase and a 1 percent Virginia Retirement System contribution.

David Myers, Assistant Superintendent of Business and Finance, explained to the budget and audit committee where school division revenue will come from in the coming fiscal year. Chesterfield County provides 44 percent of the schools budget, the state provides 41 percent and state sales tax provides 11 percent while the remaining 4 percent is made up of Federal/State/Local, other and prior year unspent revenue.

But revitalization of schools seems to be the most difficult part of the school division’s challenges. According to the schools Capital Improvement Program document, “school and public safety projects to be funded by future debt issuances. The county has the option of financing these capital improvements through the use of general obligation bonds, which require voter approval, or through the use of capital lease purchases.” Likewise, school projects may be financed through the continued use of the Virginia Public School Authority bonds or by general obligation bonds, jointly issued with the county. “Historically, the county has relied on general obligation bonds to fund needed infrastructure. On the county side, two public safety projects are currently proposed in the plan; the method of financing is to be determined, pending further direction from the board.”


Post new comment

More information about formatting options

This question is for testing whether you are a human visitor and to prevent automated spam submissions.