“The department heads are going to have some tough decisions. What road programs are we going to fund? What social services programs are we going to fund? It’s going to be tough — really tough,” said Councilman Robert Oliver, chairman of the council’s finance committee.
Numbers released by the city last week show the sale of Dominion Semiconductor to Micron Technology Inc. is costing the city about $2.5 million in lost machine and tool tax revenue this year, up from the $1.5 million estimated in September.
The loss in revenue comes at the same time the state government has begun to cut funding to certain city agencies. The commissioner of the revenue’s office is now down $9,884. The treasurers office has lost $12,663.
“These are the first ones we have concrete numbers on,” said Patricia Weiler, the city’s finance director.
At a work session of the City Council last week, Councilman J. Stephen Randolph wondered what would happen next.
“This is the beginning of what we will see more of, the state taking away more money. So what are we going to do about this?” he said.
The funding cuts for the commissioner and treasurer are part of $885 million in spending cuts announced by Gov. Mark R. Warner in October. The cuts were the limit of what the governor could do on his own to rein in the state’s $1.5 billion revenue shortfall.
The governor is expected next month to announce budget cuts for the General Assembly to consider early next year.
At this time, the situation is still too vague for the city to begin making concrete plans, Oliver said.
“There’re certainly not going to be any increases (in funding). And we might have to put a freeze on salaries,” he said.
For Manassas City Public Schools, which has a revenue-sharing agreement with the city, falling tax revenue due to Micron has left the district with more than $200,000 less than what was predicted at the beginning of the year. And the General Assembly might also end up cutting state revenue for schools.
Staff writer Chris Newmarker can be reached at (703) 368-3101, Ext. 119.