City Council began discussion this week on the proposed City budget for the next fiscal year.
Council members must continue to fund City programs and projects, with a focus on education and increasingly limited sources of revenue.
Council members cited declining personal property tax revenues as a reason for lower City income and expressed continued frustration with the Virginia state legislature's unwillingness to properly reimburse the City for state-mandated programs.
"If the state would fully fund the communities in terms of their obligations, we'd all be in good shape," Mayor David Brown said.
City Budget Manager Leslie Beauregard presented a report on long-term financial issues and the 2006 budget development Monday at the weekly Council meeting. The report presented a gap between projected expenditures and projected revenues for fiscal periods between 2006 and 2010.
The report also presented personal property revenues as a major 2006 revenue issue. Declining revenues from personal property taxes were suggested to be a leading cause for the gap between projected City expenditures and revenues.
Council members pointed to the declining value of used cars due to market forces.
"There has been an upheaval in the car market," Council member Blake Caravati said. "Car companies are overproducing and lowering prices, which drives down the used car market."
Personal property taxes collected upon the purchase of used cars is a major source of personal property tax revenue for the City.
"The City has only a few income streams, and personal property tax is one," Brown said.
City Council members, when interviewed, also expressed a common frustration with the Virginia state legislature's poor record of reimbursing the city for the increasing amount of money spent on state and federally mandated programs such as the No Child Left Behind Act.
"Because the state is running a surplus, it should not be ripping off the localities," Vice-Mayor Kevin Lynch said.
When interviewed, Council members suggested various approaches and goals in dealing with the gap between the projected revenues and expenditures, such as analyzing the effectiveness of City programs, avoiding cuts to law enforcement and public education, and not relying so heavily on property taxes for revenue.
Council members began budget discussions earlier than usual this year, in order to look at various budget scenarios and get community feedback.
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