Prince William to face even bigger budget shortfall

And the news just keeps getting better.

Even with a $1 tax rate, Prince William supervisors learned Tuesday afternoon that the county will face a budget shortfall of more than $8 million -- and the unhappy prospect of deciding within the next three weeks which pro-grams to cut.

That projected $8.1 million shortfall is a base figure that could grow even larger, depending on how supervisors vote on certain budget proposals. For instance, if board members opted against a plan to increase the motor vehicle decal fee from $24 to $38, that revenue gap would increase another estimated $4 million, according to updates from the finance director at the supervisors' meeting.

"As you can see [trends] are going in the wrong direction," said Finance Director Chris Martino, at the outset of his presentation to supervisors.

Of greatest impact, he explained, were the unexpected changes in real estate values for residential proper-ties.

Late last year, county estimates put the average value of single family homes for this coming fiscal year at $515,000; for town houses, $324,000; and for condominiums, $300,000. Now, true values are significantly lower -- much more than the 16 percent that was projected and used as a basis for fiscal 2009 budget planning.

Current values put single family houses around $367,000; town houses, $244,000; and condominiums, $217,000, according to fiscal updates provided by Martino.

"The values were significantly less," he said. "That surprised us some … [but they're based] on the market that's out there," as set by developers and potential buyers, and the former is enacting price cuts at a rapid pace.

Meanwhile, Martino continued, revenues from sales taxes and Business, Professional and Occupational License fees are also on the downswing.

"In real estate, it's another $400,000 less than anticipated because of delinquent tax payments, they're coming in at a slower rate," Martino said. "In sales tax, BPOL, the economy has people spending less," which translates into less revenues overall for the county.

On the commercial side, the latest finance figures indicate the hotel industry can expect a tax bill increase of roughly 4 percent; industrial, of 3.3 percent; and all types retail and office, 7.7 percent and 6.3 percent, respectively.

Looking into the future doesn't bode any better in terms of low tax bills for residential or commercial, ei-ther.

"We actually have fiscal year 2010 figures with $18 million less than the [current] five-year plan," said County Executive Craig Gerhart. "In the months ahead, we're going to talk to you about some alterna-tive revenues … you don't have a lot of flexibility as policy makers."

Most of the alternative revenue suggestions would require state approval to enact, Gerhart said.

The county is due to approve the upcoming year's budget on April 29.

Staff writer Cheryl Chumley can be reached at 703-670-1907.