George,

I oppose cutting taxes in this budget cycle. Yes, we do have a surplus, but we also have a number of Capitol Improvement Program (CIP) projects that are not on this year's budget, including school facilities (repair of existing buildings and expanding preschool), new courts facilities, and neighborhood infrastructure (sidewalks, traffic calming, etc). Next year, the City is planning to increase its bond issue from 5,000,000 to 7,500,000 to pay for the increase in CIP projects, so I think it hardly makes sense to cut taxes now. Instead, we should be using the surplus for CIP needs and to reduce our total bonded debt.

If we reduce our bonded debt now, or over the next few years, the City will always have the option to restore it in the future, should the need arise - for example if a correction in the stock market results in a mild recession. With a AAA bond rating, it would be a lot easier for the City to float a new bond than to raise taxes, if we need to make up a future shortfall in revenue.

The City currently pays 4.3 million dollars a year to service its debt load, which is considerably more than the surplus. If we can reduce this figure, it will result in a sustained decrease in City expenditures. When the City gets a handle on the rate of increase of expenditures (this year, expenditures rose by 4.7 million dollars), THEN we should think about cutting taxes.

Kevin Lynch, Charlottesville (electronic mail, March 31, 2000).