Budget season worry begins

CHRISTIANSBURG – It’s early in budget season yet, but Montgomery County officials are worried that the spending outlook could be tougher than they anticipated.

The jitters are prompted by Gov. Bob McDonnell’s state budget proposal, which was unveiled last month and pitched Wednesday in the governor’s State of the Commonwealth address. Local officials across the state are pondering what McDonnell’s proposal – which is certain to be modified to some degree during the just-started General Assembly session – could mean for them.

While McDonnell touted new funding for K-12 education, Montgomery’s Board of Supervisors heard last week that the county actually would receive less under the governor’s plan.

Assistant County Administrator Carol Edmonds told supervisors that while the schools got new money for some programs, the net result of the governor’s proposal would be $5.1 million less in state support for Montgomery schools next year.

That figure included $2.6 million the schools will have to pay in additional contributions to the Virginia Retirement System and a $1.9 million reduction in support stemming from a proposed change in the state funding formula.

Montgomery County officials have already telegraphed a 10-cent increase in the county’s real estate tax rate to cover costs of new high schools in Blacksburg and Riner and renovation of Auburn Middle School. Bond rating agencies have based their favorable assessment of the county’s finances on an assumption that the increase will be adopted.

And the county’s schools, like many others across the state, are scrambling to adjust to the end of federal stimulus money that in recent years has paid salaries and covered other costs not paid by state or local governments.

“It’s sort of a perfect storm of bad stuff happening,” said Kitty Boitnott, president of the Virginia Education Association.

An association analysis found that McDonnell’s proposal offered an average 4.3 percent increase in direct aid to school systems between 2012 and 2013. Most New River Valley localities showed a smaller gain, however. The exception was Radford, which the VEA said would gain 10.47 percent, or $817,760 in state aid payments under the governor’s plan. A much smaller gain, less than 1 percent, was shown for Radford in the second year of the biennial state budget.

Radford City Manager David Ridpath said Thursday that while he has not received a formal budget proposal from the schools, he anticipates the city’s contribution will remain constant.

“Everybody was thinking and planning VRS was going to go up,” he said. “Of course, those were pretty drastic numbers” in McDonnell’s proposal.

Other New River Valley officials also hoped for minimal effects.

Blacksburg finance director Susan Kaiser wrote in an email that the town expects state support for law enforcement, which has dropped over the past five years, to remain level in the new budget.

Robert Hiss, Pulaski County’s assistant administrator, said it is too soon to know how the state budget will play out on the local level.

“We’re probably four to six weeks away from having anything to talk about,” he said.

Jim Politis, chairman of the Montgomery County Board of Supervisors, said it’s too early to know what size tax increase may be needed. Supervisors have a budget work session set for Feb. 6, and don’t expect to have a formal budget proposal for at least a month after that.

“I’m going to do what I can to keep from going over the 10 [cents],” Politis said Friday. “But I’m not going to sacrifice services.”

Calling himself an “eternal optimist,” Politis said he sees hope in the announcement last year that BackCountry.com will build a facility in the county, and in other prospects for new or expanded business.

“I look at ways to generate business to generate dollars, not try to tax people out of their real estate,” Politis said.

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