Danger zone

Looks like Frank Lucente has cornered himself back into being the minority again. “If we don’t get ourselves under control with spending, we are going to pay our price, and I am saddened that we are going to raise your taxes,” the singularly focused vice mayor said after Tuesday’s 3-2 City Council vote to maintain the current 70-cent property-tax rate in Waynesboro.

The papers, being the papers, refer to the vote as being one in favor of a tax increase citing the average 5.1 percent increase in property reassessments in the 2009 assessment cycle, but of course the truth is much more complicated than that. The bulk of increase in reassessed values came in the commercial arena, which saw its valuation increase on average 17 percent citywide, a sign of the city’s surprisingly strong economic health given everything else we have going on around us right now, most notably, unemployment breaking the 11 percent barrier in March.

But other indicators are showing the River City to be coming out of the recession that has more than doubled the number of unemployed in the last year and a half and put a mighty strain on city finances, forcing City Council to cut more than $2 million in city spending in the past two budget cycles. Taxable sales in Waynesboro for the first quarter of 2009 were at $102.4 million, according to the Virginia Department of Taxation, up $2.5 million over the fourth quarter of 2008 after two consecutive quarters of decline. And the biggest growth in those numbers among the subgroups of the local economy were in retail and food services, up a combined $5 million in the first quarter of ’09 from the fourth quarter of ’08.

In that context, then, it’s actually quite sensible for City Council to not make additional, potential service-delivery-damaging cuts on top of the $2 million already jettisoned from the budget over the past 18 months, particularly when Lucente and his ally Bruce Allen when pressed for specifics on what more could be dropped from the city budget have not been able to produce anything substantive.

It’s time for the city to come out from under its shell and take active part in the recovery, first and foremost by getting an economic-development director on board after going on 10 months with a development office that exists in name only. All indications are that we’re going to be out of the macroeconomic recession by the fourth quarter of the current year at the latest, and I’m wondering based on the numbers that I’m seeing if the economists won’t look back in a few months and retroactively declare that the recession was over in March or April. That does seem to be the case at least in Waynesboro with the push back in taxable sales in the direction of what for us was a record-high level in the fourth quarter of 2007, at $112.6 million, after dipping to a nadir of $99.0 million in the first quarter of 2008.

Slowly, surely, money is being freed up by investors and lending institutions to go back into industrial and commercial and residential development, and we’re going to need to be in a position to participate particularly in the industrial development activity that we’re going to see arising out of the new focus on green technologies funded in part by the federal stimulus package that Lucente and the tea-party set railed at as being a disaster in the making.

I’ve been cautioned to be careful in using the label conservative to apply to the likes of Lucente and fellow No, No!, No!! man Grover Norquist by more sensible conservatives who realize that an important part of the conservative approach to government is making sure to protect the investments of taxpayers in their quality of life. Mayor Tim Williams, who split with Lucente and Allen to vote in favor of the 70-cent rate, and was rewarded for his actions by literally being shouted down as a “liar” and “traitor” by the tea partiers afterwards, is one of the more commonsense conservatives that you’ll meet.

The News Virginian reported that Williams said last night that he was “convinced in his heart” that lowering the tax rate “is not appropriate at this time” because the city is already operating on thin fiscal margins.

“My thinking has always been that 70 cents is a low rate. We’re the sixth or seventh lowest rate in the state now,” Williams said, leaving unsaid what I think is the key point in this whole debate.

How much lower do we have to go before we put the economic future of this city at dangerous risk?

 

– Column by Chris Graham

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