A dip into reserve funds and numerous small spending cuts have allowed the Manassas Park City Council to include a tax rate cut in the city’s proposed budget.
The council voted unanimously Tuesday night in support of reducing the city’s real estate tax rate from $1.37 to $1.33 per $100 in the coming fiscal year, which starts July 1.
Vice Mayor Kevin P. Brendel boasts that the proposed $45.1 million budget, which includes a $25.4 million general operating fund, lessens the burden of higher taxes while providing needed city services.
The budget provides the more than $9 million requested by the schools. It pays for two new firefighters, a new police officer, construction of a $1.9 million fire station near City Hall and $25,000 for police station improvements.
“I would say the budget we’re sending to advertisement gives the schools the money they need to operate,” Brendel said. “And it addresses other areas of need in the city.”
At the same time, the new tax rate would lessen the amount of extra money local residents will have to pay on their homes in the coming year. In Manassas Park, homeowners are facing an average assessment increase of 20 percent this year.
With an active real estate market causing real estate assessments to skyrocket, tax rates have become a major source of concern for Northern Virginia residents. And local governments are responding. In Prince William County, the proposed budget under discussion would lower the tax rate from $1.23 to $1.16 per $100.
In Manassas Park, the rate cut takes away $340,000 in extra revenue for the city, according to City Manager David Reynal.
The original budget proposed by Reynal included no rate cut. However, the city’s contribution to Prince William County for jail, library and other services was overestimated by $300,000. The difference gave the council more room to cut the rate, Reynal said.
Many small cuts, such as holding off on hiring a new worker at the city treasurer’s office, also helped the council find the money for a rate cut, Brendel said.
“Our department heads were prudent in what they asked for,” he said. “They helped us in the process of saying, ‘This isn’t critical. We can wait to have it.'”
The city, however, is also taking money out of its reserve fund for a second year in a row. For the present fiscal year, which ends June 30, the city is taking out $1.1 million. The city is now proposing taking out another $1.71 million, leaving $3.7 million in its reserves and $1 million in its special emergency fund.
Councilman I. Allen Correll believes the city will have to look closely at ways it might save money in coming years, possibly combining services with Manassas and Prince William County or contracting them out.
“We have to reduce cash flow,” he said. “The price of government has to go down.”
The City Council will meet April 8 to hold a public hearing on the proposed budget. A final vote on the budget is scheduled for April 21.