By William J. Des Rochers, Fluvanna Field Officer
In a harbinger of things to come, Fluvanna County schools will receive less funding from the state, based upon its revised composite index. The index is a complicated formula that determines funding allocations based upon such criteria as the county’s property value, adjusted gross income, school enrollment, and taxable retail sales. County officials expect that the funding cut could approach $200,000.
While the amount is seemingly small, it reflects a broader problem for the county: revenue streams are decreasing while spending obligations – most notably debt — are growing. According to County Administrator G. Cabell Lawton IV, the county’s budget woes in the last fiscal year were attributable directly to the decline in revenues, not significant unanticipated spending.
Currently the county is owed some $2 million in delinquent taxes, penalties, and interest. This represents the equivalent of a six cent tax hike for one year, or twelve percent of the tax rate. But notwithstanding the County Administrator’s claim regarding FY 2010 spending, Fluvanna government has grown significantly over the past decade.
Had county government kept spending growth in line with inflation and population growth, budgets would have grown an annual average of about 5.6 percent over the past ten years. Instead spending rose by an annual average of 10.5 percent in major budget categories – over 80 percent higher.
Current county spending is about 50 percent higher that it otherwise would have been had officials kept to the 5.6 percent annual average.
Now the new Board of Supervisors will be in a severe bind. Debt payments will increase dramatically in FY 2011 and county taxes may have to rise significantly to meet those obligations. Spending cuts also may be a part of the debt payment strategy since each million dollars in savings will generate about the equivalent of three cents on the real estate tax levy.
Supervisors will have to use this two-pronged approach – higher taxes and lower spending – and the first key question they will face is how to proportion the two.