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The last act of this year’s budgetary fun and games has just about finished. Bedford City Council will soon adopt the city’s budget for the coming fiscal year and there isn’t any drama in this one. Nobody spoke last week at a public hearing on the budget and that’s probably because it contains no tax hikes, although it will cost city residents 2 percent more to use the toilet. The school budget, which upset so many people, has already been settled and the city’s contribution to this is specified in its contract with the county for school services.
That doesn’t mean that everything will be smooth sailing from here on. Expect next year’s budget wars to be as bad, if not worse than this year’s. They may be worse as the school board plugged a $2 million hole with federal stimulus money that won’t be there next year.
The primary problem is that localities are between a rock and a hard place. The rock consists of unfunded mandates, mostly state mandates courtesy of that happy bunch of pirates in the General Assembly. These mandates leave localities with little wiggle room in tough budget years. Bedford County’s supervisors had to wrestle with the fact that two-thirds of their budget consisted of state-mandated expenditures.
This really needs to stop, but our state legislators don’t seem to get it. If not for Gov. Bob McDonnell’s veto, school divisions in the Commonwealth would have been saddled with a state mandate to provide substantially more physical education in elementary schools. The goal was to fight childhood obesity and the result would have been to force school divisions, already struggling to pay for existing programs, to spend millions more. Unfunded mandates are great for state legislators who get to take credit for addressing this, that, and the other, while making local elected officials be the bad guys who have to take the money out of taxpayers’ hides to pay for these mandates.
The hard place is that local governments will have difficulty raising taxes. A look at your most recent paycheck shows part of the reason why. We are already heavily taxed on the federal level.
The other reason is that most local tax revenue comes from the real estate tax. Perhaps somebody can come up with a way for local governments to extract more money from those who could afford to pay higher taxes while not hammering those who can’t. But until that happens, Virginia localities are stuck with a tax that worked fine in Thomas Jefferson’s day. Back then, 90 percent of our population lived on farms and this tax was on income producing property. That’s no longer true and the value of your house is an inaccurate reflection of your ability to pay. The assessed value of the place can rise even if your income has taken a hit due to something, such as a job loss.
Something has got to change and I think the biggest change needs to come from Richmond. The General Assembly must either fully fund what it mandates, or eliminate the mandate.
A second area of change that must happen is that people need to adjust their mind set about what they expect the government to do. Some civic minded groups are on the right track, such as garden clubs. Every time I walk past Bedford’s city hall, I admire that flower bed in front of the building. It’s beautiful and it doesn’t cost taxpayers a cent. A garden club maintains it. The skate park at Falling Creek Park is another example. That was built in its entirety by private funds. More groups in the community need to step out and do work, and local governments need to be receptive to their efforts.
Maybe something will eventually be done to bring change, but I don’t expect that to happen to keep next year’s local budget process from turning into a soap opera. You may want to consider attending the meetings as they could be quite interesting.