Charlottesville City Council members approved the city's final budget for fiscal year 2010-11 Monday evening, opting to maintain the current real estate tax rate and preserve service jobs.
This $140.8 million budget resembles last year's plan, although spending has decreased by less than 2 percent. The operating budget, which is set to be $126 million, will see a decrease of less than 1 percent.
Council members attempted to balance revenue losses with an attempt to avoid raising the real estate tax higher than last year's rate of 95 cents for every $100. Because property values have gone down, however, 90 percent of homeowners will pay less than or the same as the amount they did last year, Council member Satyendra Huja said.
In addition to overall revenue declines, the city will experience a decrease in some particular state revenue sources. For example, state aid for constitutional officers and police protection will decrease, as will city revenue from sales and meal taxes, Budget and Utilities analyst Ryan Davidson said.
Regardless, Council managed to cope with the reductions without laying off any individuals or eliminating any services.
"We had no service cuts and no layoffs," Director of Communications Ric Barrick said. "It was cutting corners where we could."
To accommodate the reduction, the city will keep employees' salaries stagnant for the third year in a row and will spend less on trash collection and recycling next year, among other measures.
Even with the economic decline, Council increased funding in several areas, from jails and juvenile detention centers to parks and recreation. The new budget also has $110,000 set aside for transit system improvements, although Council has not decided how and where to enact those improvements, Davidson said.
The city budget's ability to weather the recession may in fact have been lessened by Charlottesville's recent history of conservative spending.
"In past fiscal years ... we've not increased our expenditures beyond our means," he said.
This year's budget process may have been relatively painless for Charlottesville, especially when compared to surrounding localities in Virginia, but the city may see the effects of lower revenues next year, Davidson said.
Barrick expressed similar sentiments, noting that the fiscal year 2011-12 budget may have to cut more corners.
"Localities tend to lag behind," Barrick added. "It's usually a year after sales figures hit bottom that we see the result of less revenue coming in from taxes. This year, we didn't have to make many difficult decisions, but we're trying to get the people of Charlottesville to understand that the next year might not be that generous."
Officials indeed may have to cut services if revenues decline again next year, but Barrick said he hopes that other revenues will make up for the difference.
The budget will go into effect July 1.
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