Economy cramps Staunton budget

In a budget that has been “significantly impacted by the downturn in the global economy,” Staunton City Manager Steve Owen presented a $94.2 million fiscal year 2010 budget with a 90-cent real estate tax rate Thursday.

The proposal is $2.9 million less than the current budget, and about half the budget — $45.7 million – is in the general fund.

Though Owen’s budget was based on a tax rate of 90 cents per $100 of assessed value, two members of the council – Vice Mayor Dave Metz and Councilman Bruce Elder – sought, but failed, to have a higher tax rate advertised to allow the council latitude, they said.

Both a 92-cent measure introduced by Metz and a 91-cent measure introduced by Elder were defeated by 4-3 votes. Mayor Lacy King, Councilwoman Andrea Oakes, Councilwoman Carolyn Dull and Councilman Dickie Bell voted against the two higher rates.

All seven members voted to introduce the budget as Owen presented. Neither Metz nor Elder said they would necessarily vote for an increased rate, but Oakes said advertising an increased rate would tempt the council to use the extra money and put too much of a burden on residents. Bell said he would prefer to see a revenue neutral rate of 87 cents, with reassessments up 6.8 percent this year.

Each cent on the tax rate equals $177,629. A three-cent reduction would mean another $532,887 in budget cuts. A 90-cent rate is a 3.4 percent increase over the revenue neutral rate.

“The economy will recover; until then, tough times call for tough choices, and this budget is no exception,” Owen said in presenting the budget during the council’s work session.

Owen left all tax rates and fees the same as what the council adopted in fiscal year 2009, though tax revenues are

either declining, or projected to decline, he said.

Sales taxes are projected to drop by $676,000, with business and occupational taxes expected to go down by $360,000. The city, Owen said, also expects to lose money from personal property, meals, lodging, bank stock and recording taxes, in addition to building inspection and zoning fees.

Owen said the city would receive an additional $366,557 from the state, mostly in street maintenance, health and welfare, and Comprehensive Service Act payments.

The city is also not proposing any merit or cost-of-living salary increases, and is keeping frozen more than 27 vacancies – 14 of those full time. However, health care coverage is projected to increase 23 percent.

Owen cited a number of operations cuts in the proposed budget, including the closing of the Teen Center and ending the long-standing agreement the city had with the National Guard to maintain the Staunton Armory. Employee travel and training have also been cut.

The city school division would receive $11 million in general fund money, and $28 million overall in the proposed budget, as state funding has been cut by $1.45 million and local funding cut by $727,773 below the current budget level.

Public safety funding would drop by 3.2 percent, to $8.7 million, in Owen’s proposal. Police would receive $4.3 million and the fire department $2.2 million. It would leave vacant two police officer and three fire/emergency medical technicians and a building inspector.

Public works would receive $4.9 million, and health and welfare $5.8 million, the biggest portion going to the Department of Social Services ($3 million). General government administration would receive $4.38 million, while the city would pay out $3.65 million for debt service.

“This budget does not have any wiggle room,” Elder said.

Metz, meanwhile, said he was concerned in the $5,000 cut to the Boys and Girls Club, citing increased gang violence in the city.

“We knew this was coming,” Dull said. “It’s not a surprise.”

Schools Superintendent Steven Nichols said the city faces what he believes is a five-year problem, as he does not expect the economy to recover quickly.

“I do think we have eliminated every dollar of waste, if there was any, and I’d argue that point,” Nichols said.

Oakes termed the budget extreme, but workable.

Bell, meanwhile, said he would work for an equalized tax rate, but not at the expense of anyone losing their jobs. He said he has had conversations with Owen, who indicated to him that the city could find cuts, though they “might be painful.”

“I’m going to try that, because I just feel the thing we need to is not to continue to place a burden on the taxpayer,” Bell said.