With the U.S. and Virginia state economies still limping along, the Alexandria city council on Saturday steeled itself for another lean budget year.
City manager James K. Hartmann summed it up rather bluntly.
“This next budget could quite possibly be the hardest budget any of us have ever faced,” he said at the council’s budget retreat.
The city’s real estate tax revenue is expected to take a big hit — as is the case with many jurisdictions. Officials are projecting a roughly 8 percent decline in total real property assessments, with a 5.7 percent drop as a “best case” scenario and a 9.4 percent drop a “worst case.”
Commercial property assessments are projected to drop from between 7.7 percent to 15.5 percent, with a “likely” drop of about 13 percent. The city is thus faced with likely service cuts — cuts that councilman Rob Krupicka described as a “wake-up call.”
With revenues projected to limp along in the near future, he said people in the community should assume that the cuts the council makes now won’t be restored for years, thus creating what he called a “new normal.”
“Unemployment is going to be impacting us all,” said Mayor William D. “Bill” Euille.
Euille noted that the city is preparing to face “the worst of the worst,” but that it is in a bit better position than neighboring jurisdictions like Arlington, Fairfax and Loudoun counties.
Nearby, Arlington is anticipating a 9.2 percent decline in real estate revenues and a 14 percent decline in commercial assessments.
“Closing a gap of this magnitude will require a strategic balancing of tax and fee increases and noticeable service reductions,” said County Board Chairman Barbara Favola in a recent statement.
Increasingly bleak revenue projections at the state level mean help from the commonwealth is unlikely.
Alexandria should be assuming “dramatic cuts” from the upcoming General Assembly session, Krupicka said. And vice mayor Kerry Donley was skeptical about any potential state-level tax hikes to shore up the budget.
“Given the results of the election earlier this week, there aren’t going to be any tax increases, that’s for sure,” he said.
