Hartmann Proposes $553.4 Million Budget for Fiscal Year 2012

City Manager Jim Hartmann proposed a $553.4 million fiscal year 2012 operating budget for the City of Alexandria on Tuesday evening. 

“We dealt with a budget shortfall during the last three years,” Hartmann told the City Council at his budget presentation in council chambers. “We didn’t do any budget gimmicks and that’s why today we are able to present a budget that does not begin with a shortfall.” 

Hartmann noted that there is no tax rate increase in the base operating budget for FY12. However, “we’ve also asked our employees to contribute more when it comes to medical insurance and retirement benefits,” he said.

The budget proposal includes a plan to increase city employees’ minimum share of health care insurance premiums to a 20 percent minimum in fiscal year 2013.

Additionally, “for fourth year in a row, we’re not presenting any across the board salary adjustment” for employee compensation, Hartmann said. “There are mixed things in here but based on what is going on throughout this nation…I think these things are fair.”

The budget plan also proposes a “transportation add-on tax,” at a rate of 12.5 cents per $100 assessed value for non-residential commercial properties.

“We’re trying to be all about economic development and quality of life and we’re not going to be able to achieve that unless we put … more into our public infrastructure,” Hartmann said, adding that he proposed the 12.5 cent rate, which is the highest rate allowed by the state, “because time is important on this one.”

“We are sensitive to the business community that we put this tax on,” he added. To ameloriate some of the concerns from groups such as the Alexandria Chamber of Commerce, Hartmann offered a proposal to partially offset this tax by reducing business license taxes.

Arlington County adopted a transportation-add on tax several years ago and it's now at 12.5 cents. Fairfax County's similar tax is 11 cents.

"Many commercial leases have tenants who pay taxes and services and this could be a fee that passes on to the tenants," Councilman Frank Fannon said.

Hartmann said a "major issue' in the city's Capital Improvement Plan strategy is the Alexandria City Public School superintendent's request for $372.6 million for fiscal year 2012. Last year's approved CIP allowance for schools was $158.1 million.

Hartmann said the superintendent's request is "far in excess of what we have capacity for."

The $327.6 million is a 136 percent increase from the prior year's allowance.

The proposed operating budget includes no tax rate increases and no new cuts to city services.

In the proposed budget, total spending by the city increases by $21.7 million from the 2011 budget, an increase of 4.1 percent.

"It’s now our time to roll up our shirt sleeves and work through the budget process and hopefully there will be a firm commitment that there will be no tax rate increase,” Mayor Bill Euille said. 

City revenue will fatten thanks to higher real estate assessments.

Assessments for all properties from January 2010 to January 2011 are up 2.55 percent. All residential properties are up 1.25 percent, with single-family homes up 1.84 percent.

All commercial properties are up 4.91 percent during that same time frame.
Average homeowner property taxes (if there's no change in a tax rate) would go up $18 a year, or 0.4 percent.

An average single-family home will go up $62 per year or 1 percent, but the average condo will go down $30 a year for a 1.1. percent decrease.