Manassas Journal Messenger | Schools brace for tax reduction

If the Manassas City Council follows through on a proposed 10-cent reduction of the real estate tax rate, the School Board’s five-year budget forecast could show a deficit of more than $3 million by 2006.

The City Council approved a fiscal 2006 budget forecast, which included the proposed 10-cent real estate tax reduction from $1.15 to $1.05, on Monday.

That forecast sent ripples through the School Board on Tuesday night. Based on projections that include the reduced tax rate, the School Board’s forecast shows expenditures of $80.2 million, while revenues are $77.1 million in 2006.

The board is required to present its own forecast and capital improvement plan by Nov. 15.

By law, there can be no revenue gaps in final approved budgets, and school officials are reiterating that the city’s and school division’s budget forecasts are not concrete.

“I don’t think that there is any immediate implication,” said School Board member Scott Albrecht, who is also a member of the board’s finance committee. He added that the budget outlook could change over the next few months.

The School Board, which receives 56.2 percent of city revenue, would receive $43.6 million from the city if that tax rate reduction were approved by the city. The rate is not sustainable, according to school officials.

An increase in the special needs of the student population and needed capital improvements to reduce student overcrowding at Weems and Haydon elementary schools are affecting the budget forecast.

“Over the next five years, it’s about an $18.4 million gap in terms of revenue … required to meet both capital needs and operating needs,” said School Board Chairman Arthur Bushnell.

While some city officials are saying that the budget reduction is not sustainable for city operations either, others say that it is.

“Not only is it feasible, it should be reduced a little more,” said Councilman Jackson Miller.

Residents’ personal incomes are not increasing proportionally with tax rates, so the School Board and the City Council need to reassess their finance planning, Miller said.

“My biggest concern is the folks who are on fixed incomes in the city cannot afford those increases,” he said.

Superintendent Sidney “Chip” Zullinger will propose his budget in January.

Forthcoming information, such as enrollment projections and state revenue, during the next few months will affect that budget. The School Board must adopt a final budget by April 1.