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A far cry from distressed fiscal conditions in neighboring Prince William and Fairfax counties, the City of Falls Church ended the last fiscal year June 30 only $355,000 in the hole, the City’s Chief Financial Officer John Tuohy reported Tuesday. Tuohy’s report, the official buttoning up of the last fiscal year, included promising news of a big hike in the City’s restaurant meals tax, meaning that local restaurants did significantly better than expected last year. It is proposed that the deficit, out of a budget of $70 million, be made up out of the City’s fund balance, City Manager Wyatt Shields said at the
Council work session. Formal Council approval of the step will be sought at its first regular business meeting of the month on Sept. 8. Shields said he will get the first snapshot of how revenues are going in the current fiscal year, beginning July 1, in the next few weeks. Then, he told the News-Press yesterday, “We’ll see if we have to trim our sails a little bit” in the current year, given the on-going economic downturn. He said he expected about $400,000 will have to be cut from the current budget. But the problems Shields anticipates are nothing like the $400 million deficit facing Fairfax County this fall, triggering 20 extraordinary public hearings that the Board of Supervisors will hold this fall
to determine how and what programs to cut. Prince William County’s problems are even more severe, proportionally speaking, Tuohy told the City Council Tuesday. He noted that a whopping 83 percent of the home sales in Prince William County are “distress sales,” either of foreclosed homes or of people seeking to avoid foreclosure with dramatically-reduced costs. The figure is even higher, at 90 percent, in the City of Manassas Park, and is 30 percent county-wide in Fairfax. By comparison, four percent of home sales in the City of Falls Church are “distress sales,” he reported. “In my 25 years in this kind of business, I have never seen anything like this,” Tuohy said of the housing crisis in
the region, in remarks to the News-Press. “These are truly Depression numbers.” He added that in his view, the situation will still get worse. “The majority of the adjustable rate mortgages taken out by sub-prime borrowers reset in August,” he said, noting that it will take a few months for the ballooning new monthly payments to drive a new wave of homeowners out of their homes. Tuohy said his personal view is that it will “take three to four years” for it all to play out. But it was been widely reported that the situation inside the Beltway is vastly different, with home values dropping only slightly at best. With the region-wide turnover coming in Continued on Page 5