County revenue growth declining
By Greg Pearson STAFF WRITER

County revenue growth is shrinking, partially caused by a slowdown in the real estate market. New home construction (above) is still a common sight, however, in the western part of the county.

Chesterfield County is keeping a close eye on its shrinking budget surplus as an uncertain economy impacts local revenue. A recently completed audit of FY07 (ending June 30) reported a budget surplus of $14 million compared to $26 million in FY06.

"On a budget of $1.2 billion, a surplus of $14 million is not a lot," County Administrator Jay Stegmaier told the Budget and Audit Committee last week. "We're looking at actions we can take to reduce the expenditure side of the budget."

"It's disturbing seeing the surplus being reduced," commented board of supervisors Chairman Kelly Miller.

All property taxes (real estate property taxes, personal property taxes and some business taxes) declined to 7.5 percent growth from 9.1 percent the previous fiscal year. Part of that decline occurred as a result of the 7 cents reduction in property tax rate.

Sales tax revenue from the state also declined to 5.4 percent growth from 8.7 percent in FY06. Sales tax revenue growth since July 1 this year is tracking at about 4 percent. Part of that reduction can be attributed to slower automobile sales as local new car dealers return to incentives to attract buyers.

"There are concerns we have given the state of the economy going on around us," said Budget and Management Director Allan Carmody. "A lot of it has to do with the uncertainty of the real estate market impacting buying habits including vehicle registrations and local sales taxes."

A couple of months ago, Chesterfield implemented a 3 percent spending cut for general fund budgeting and continues to monitor "monthly expenditures and revenues across the board."

The transfer of funds from the county to the school system has not yet been affected, though schools are seeing the impact of declining revenue from the state.

"We have talked to the schools and not made any reductions," added Carmody. "We want the school system to know what we see on the horizon so they can guard against potential revenue shortfalls."

Though Chesterfield is experiencing a slowing growth rate, it is far better than the declining revenues Virginia is experiencing. "We are taking steps to prevent being in a deficit mode," assured Carmody.