While the Christiansburg
Planning Commission will meet today, including a review of capital improvement plans, citizens and general business operators would be well served to attend Tuesday's Town Council meeting. Tuesday's meeting includes a
Public Hearing on the proposed budget, which was last discussed by the Finance Committee and town administrators on May 7 during what was reportedly the
first public work session held by council for the annual budget preparation.
Even though last year's town budget neutralized real estate taxes (rather than having the traditional, automatic increase because of reassessed property values), the proposed
2008-09 fiscal budget (FY 2008-09) included almost $2.7 million
unspent revenue with another $2.2 million held in
reserve for recreation (possibly to offset a part of the $14 million aquatic center costs). One week earlier a $2.6 million deficit was presented to the Finance Committee, so this shift represented
$7.5 million worth of juggling the town's revenues and expenses or nearly 6% of the overal proposed budget.
The proposed budget included one-half of one percent increase to the current 6% charged for prepared foods (
meals tax), but folks should note we don't use half-pence in the USA so it's rounded up to a whole number. The Christiansburg meals tax already represents the largest revenue source for the town and is one of the highest in the region. You can buy that same burger for less in neighboring localities today.
While meals tax receipts may increase due to tourism related activities, no one in the restaurant industry gets a say in how these taxes are used even though they are tasked with collecting the tax (on top of the state's 5% sales tax). Nor does any percent of the meals tax get rolled back into tourism related initiatives by Christiansburg.
Contrast this to the town's
lodging tax of 7%. One percent of the town's lodging tax is handed over to a group representing those required to collect this tax, which gets to decide how that 1% will be used to compete for and attract tourism spending within Montgomery County. The lion's share of the nearly $500,000 this represents since July 2005 and allocated to the Tourism Development Council (TDC) comes from Christiansburg businesses. The only
tourism (or
community or economic) development initiative by Christiansburg's town council is represented solely in the 1% allocated by contract to the TDC.
So while these user taxes -- lodging and meals taxes -- may be seen as something the consumer pays, it does impact Christiansburg residents as an additional
local tax paid when buying certain products or services, and it matters how these funds are invested or whether results help hold down other tax increases.
Water and sewer services are user taxes, too. For years, Town Council has elected to supplement these costs because fees were insufficient to cover the actual expense of providing these services. The FY 2008-09 proposed budget includes raising
water and sewer fees, in order to eliminate
one half of the related deficit. This means current town water and sewer bills received by consumers could be doubled, and would then reflect the actual cost of providing these services.
Over the years, this deficit
must have gotten bloated by all the growth -- as an example, if the town has 6,000 water and sewer customers paying only half the actual cost of these services, this represents a certain dollar amount. When the town had only 4,000 water and sewer customers, that subsidy would have been about 33% less than what it costs to supplement today's 6,000 users. Under this scenario, every new water and sewer customer placed even more of a burden on the town's general funds due to this subsidized approach.
The Montgomery County Chamber of Commerce established seven new
initiatives for 2008 and beyond. One initiative included monitoring key issues, including reporting on possible tax increases. The town's May 5 proposed budget included changes that affect businesses big time, from what taxes must be collected (and absorbed or passed on to consumers), inluding Christiansburg's Business, Professional & Occupational Licenses (
BPOL). The Finance Committee noted the town's BPOL was half of neighboring
Blacksburg's -- without commenting on the fact that
Blacksburg's residents and businesses do not pay any personal property taxes to the town. This may explain one of the reason's the two town's have different real estate tax rates.
The town's legal advisors were to research whether mandatory
garbage service could be charged to only residential customers, or if these fees were mandatory they would have to be applied across the board. The question came up because there are private businesses operating in the town, providing commercial trash collection. The answer, and how council decides to proceed, will impact not only the future of some town business operators, but also the actual fee increase assessed for residential garbage services. The town wouldn't really want to handle all commercial garbage collection, because it would require additional equipment purchases to handle providing this service.
Recycling -- as a means to reduce landfill tipping fees while gaining some modest revenues -- was not discussed. Previously, the three existing recycling drop points were deemed as sufficient by council.
As a side note, Blacksburg's population is estimated to be double that of Christiansburg's -- but at least 21,000 of these "residents" are transients because they are only in the NRV when classes are in session at Virginia Tech. So, in reality, the town's are about equal in actual, permanent populations. Blacksburg's proposed FY 2008-09 budget totals $72.2 million -- but $22.4 million of that is from the state's Urban Initiative Construction Fund (for roads, and no longer a source Christiansburg can tap into), and another $1.5 million is grant related (CDBG Entitlement and HOMES Consortium) that Christiansburg doesn't bother to queue up to utilize within its borders. By removing these sources of revenue from Blacksburg's budget,
the budgets of each town become comparable, as are the permanent populations.
Yet the services provided are starkly different -- from visual enhancement and landscaping, to supporting the arts and historic preservation functions, an extensive bike lane and trail system, community housing projects, neighborhood development services, curb-side recycling, extensive tourism and economic development initiatives, a state-of-the-art electronic infrastructure that includes broadcasting public meetings, and so on. And, they've had a community pool for over a decade. One could do a similar comparison with neighboring
Radford, which also provides superior services while also including public education costs in their city budget.
Curious? Concerned? Confounded? Come on down to the Christiansburg Town Hall on
Tuesday at 7:30 pm, and watch council members as they listen to citizens during the Public Hearing and then weigh these issues and determine what fees to charge.