budget cuts

County Budget Cuts, Tax Hikes Looming

By Katie Pyzyk

The Arlington County Board has asked County Manager Barbara Donnellan to plug a projected $25-50 million budget gap with a combination of spending cuts and tax increases.

At its Saturday meeting, the Board approved a set of budget guidelines intended to assist Donnellan in putting together her proposed budget for fiscal year (FY) 2014. Despite two years of rising real estate assessments and tax rates, the projected 1-2 percent increase in county property values this year is not expected to be enough to keep up with increased spending.

(The real estate tax accounts for just over 55 percent of all county revenue.)

Costs are expected to increase in FY 2014 in the specific areas of employee compensation, health care, funding for Metro, debt costs, communications infrastructure and operating expenses for new county facilities like the Arlington Mill Community Center.

Donnellan has already taken initial steps to begin cutting costs, such as ordering a hiring slow down, which has already gone into effect. Donnellan has also authorized early retirement offers to qualified staff, and has instructed department heads to provide expenditure reductions.

The county last year benefited from an $18 million carryover from the previous year’s budget. Without that carryover, revenue next year is projected at $1.039 billion while total spending is expected to increase 1.1 percent to $1.064 billion. Projected county expenditures in FY 2014 include $401.8 for Arlington Public Schools, a 0.7 percent increase over this year’s budget.

Among the factors hurting county revenue, officials say, are the impacts of the Base Realignment and Closure Act, potential federal budget cuts and stagnant real estate assessment growth.

County Board Chair Mary Hynes promised to engage the community in the budget process, but warned residents to expect some unpopular budget decisions.

“During these uncertain economic times, we will have to make some tough choices,” she said. “We look forward to months of discussion with the community as we set priorities and make those choices.”

The Board asked Donnellan for an equal mix of tax hikes and budget cuts.

“The Board emphasized the importance of maintaining long-term financial sustainability and preserving the County’s AAA bond ratings,” according to a county press release.

(more…)

Arlington Bracing For Major Budget Shortfall Next Year

By ARLnow.com

Arlington is facing an estimated $50 million budget gap next fiscal year as the county’s prodigious rise in property values stalls and as federal and state cutbacks impact the county’s bottom line.

As reported by the Arlington County Taxpayers Association and confirmed to ARLnow.com by a senior county official, a $50 million budget gap — about $25 million for the county government and $25 million for Arlington Public Schools — is projected for Fiscal Year 2014.

In a “budget outlook” presentation to the County Board and School Board on Wednesday, Arlington County Manager Barbara Donnellan said the economy is weak, local office vacancies are a concern and overall property values and county tax revenues are only expected to grow by 1 percent.

Arlington Public Schools, meanwhile, is anticipating nearly $4 million of its shortfall to come from federal and state school funding cuts.

Donnellan has asked department heads to identify possible budget cuts in anticipation of a difficult budget process.

The budget concerns come as the county pushes forward with two major capital projects that have drawn scrutiny from local budget hawks: the planned Columbia Pike streetcar and the Long Bridge Park Aquatics and Fitness Center (part of the parks bond on the Nov. 6 ballot). Arlington Public Schools, meanwhile, is in the midst of an extended period of school building and expansion expected to cost more than $250 million over the next ten years.

Moran: Proposed Cuts Will Keep Military Strong

By ARLnow.com

President Obama’s call for a leaner U.S. military with a more focused mission is receiving plaudits from local congressman Jim Moran (D).

Moran’s Northern Virginia district, which includes the Pentagon and the headquarters of numerous defense contractors, has much to lose from cuts in defense spending. But Moran said in a statement that the proposed cuts (which will actually just trim hundreds of billions of expected increases in the Pentagon budget over the next decade) will keep the military strong and agile.

The President’s new defense strategy both preserves the world’s strongest military while recognizing that our country faces difficult budgetary challenges in a security environment much different from the Cold War era our current defense posture was designed to combat.

As the President and Congress move to implement savings mandated by the Budget Control Act, I was pleased to see that the President’s military strategy will continue to make critical investments in cyberspace, Special Operations forces, counter-measures for weapons of mass destruction, and intelligence, surveillance and reconnaissance technologies. These investments will make the U.S. military more agile and flexible while maintaining its superior edge.

I am confident that when the President’s budget is released next month, it will ensure that our men and women in uniform, and their families, have the equipment and support they need to protect our national security interests around the world – including when they return home from battle.

Moran Votes ‘No’ On Debt Deal

By ARLnow.com

Rep. Jim Moran (D-Va.) voted against the debt deal that passed the House 269-161 yesterday and passed the Senate 74-26 this afternoon.

In a statement, Moran said he opposed the deal due to its lack of tax increases.

The debt ceiling has been raised cleanly 39 times over the last 30 years, 18 times by President Reagan alone. But for the first time ever, a deal has had to be negotiated to raise the debt ceiling and prevent a default. Unfortunately, the proposal we are being asked to vote on would be bad for our country. It should be rejected, and President Obama should take matters into his own hands by invoking the 14th Amendment to raise the debt ceiling.

This deal is not representative of a balanced approach to long-term deficit reduction. By leaving revenue entirely off the table, the agreement severely restricts the government’s ability to make investments in the human and physical capital of this country – investments that created the strongest middle class in the world and made our country the most powerful.

At a time of stagnant growth and high unemployment, the far-right of the Republican party has been able to hold our economic security hostage in exchange for deep cuts that will reduce growth and employment and increase inequality in the short term without properly addressing the structural causes behind our long-term deficits.

Government spending currently equals roughly 25 percent of GDP, while revenues being collected are at an historically low 15 percent of GDP. This gap, which represents our yearly deficit, is unsustainable – and despite the rhetoric cannot be bridged by spending cuts alone. Under the Clinton tax rates that prevailed during the 1990s the economy created a record number of jobs and the government actually ran a surplus for over two years, leaving a projected surplus through 2011 of $2.3 trillion. These budget deals included spending cuts and new revenues and should be the model we follow today. Unfortunately, the balanced budgets and growing surplus that were paying down the debt were destroyed through the reckless mismanagement of the Bush Administration and a Republican controlled Congress that undertook two wars, two massive tax cuts, and a Medicare prescription drug program which pays retail rather than negotiated prices. None of these policies were paid for with either equivalent spending cuts or new sources of revenue. And following the Great Recession, caused in large part by deregulation and the lack of oversight of our banking system, we are where we are today.

This agreement, unfortunately, validates the political strategy of those Republican radicals who were willing to create default and economic chaos in order to avoid true compromise and a balanced approach. Their brinksmanship has eroded the global confidence in our system of government, a confidence that made the dollar the global reserve currency and the Treasury Bill the world’s safest investment. Should this deal be enacted, which looks likely, it will have a lasting negative effect on our economy, prevent investment in our infrastructure and weaken our economic competitiveness.

Where Are The Trout?

By ARLnow.com

With floundering finances, Arlington budget sharks were forced to cancel the county’s annual trout fishing season this year.

“Trout season” is actually an artificial creation in Arlington County — a contractor stocks Four Mile Run with trout trucked in from a hatchery. But don’t tell that to the dozens of kids who show up with their parents every year with rod and reel in hand, eager to catch a fish.

In announcing that trout fishing was canceled, the county parks department advised anglers that trout fishing is still available in Fairfax County. More information about fishing in Fairfax is available here.

Reminder: Donnellan to Hold Budget Forum Tonight

By ARLnow.com

Arlington County Manager Barbara Donnellan will hold a public meeting tonight to discuss the county’s upcoming financial year 2012 budget.

The forum will be held from 7:00 to 9:00 p.m. at the Arlington Central Library’s auditorium (1015 North Quincy Street).

As we reported earlier, Donnellan has said that her recommended budget will likely not include any further cuts for county parks or libraries, but it will include sizable cuts in other areas.

Libraries, Parks May Avoid Cuts in Next Budget

By ARLnow.com

After two years of deep cuts, county libraries and parks may be spared in the upcoming budget process.

Speaking to the League of Women Voters last night, county manager Barbara Donnellan said she does not expect to make any cuts to the libraries or parks in her proposed budget for financial year 2012.

At the same time, however, Donnellan cautioned that with Arlington facing a $25 million budget gap, the libraries will likely not see a restoration of hours to pre-2009 or pre-2010 levels.

At one point, Donnellan reflected on her failed effort to close the Cherrydale library, which was met with considerable public outcry. She says that she learned her lesson about community attachment to libraries.

“I’m not doing it any more, I’m done,” she said. “It’s apparent to me that every library is going to stay open.”

In a question and answer session, one attendee said she was concerned that the county seems willing to allow a deterioration in the quality of services system-wide, instead of summoning the political will to close facilities when it makes practical and financial sense. Donnellan said that while the county must carefully weigh its budget priorities, current facilities must be adequately funded.

“As long as we’re going to keep them, we have to maintain them, and that takes money,” she said.

Donnellan pledged to close the current budget gap with a balance of spending cuts and revenue increases. She will host a public budget forum for residents from 7:00 to 9:00 p.m. on Thursday, Dec. 2, at the Arlington Central Library auditorium.

Morning Notes

By ARLnow.com

Board Considering Restoration of Library Hours — The county board will consider restoring library hours in next year’s budget, members said at Saturday’s monthly meeting. However, the board also said there was not enough money in the current budget to restore hours this year. Library hours were reduced as a result of cuts in the 2010-2011 budget. More from the Sun Gazette.

New Power Transmission Line Proposed — Dominion wants to run a new underground power transmission line from the Clarendon area to the Pentagon City area. The project, set to begin early next year and wrap up by the middle of 2012, would also result in the construction of a new power substation in Radnor Heights. More from the Ode Street Tribune.

Fourth Grade Textbook Questioned — Fourth graders in Arlington Public Schools will continue to use “Our Virginia,” a history textbook that contains at least two dubious historical claims. One such claim is that thousands of black soldiers fought for the Confederacy in the Civil War. The passage has prompted authorities in Loudoun County to suspend use of “Our Virginia,” but APS officials told the Washington Post that the school system will continue to use the book.

Flickr pool photo by Michael T. Ruhl

Budget Recommendation: Cut Programs, Find Efficiencies

By ARLnow.com

At times, the preliminary budget recommendations from Arlington’s Fiscal Affairs Advisory Commission sound more like something you’d hear on CNBC than at a county board meeting. While recommending that next year’s estimated $25-$35 million budget shortfall be made up by a 50-50 combination of spending cuts and tax increases, the commission says that longer-term changes might be necessary.

“The County may have to make structural changes to accommodate continued significant financial challenges,” the commission said in a three-page report to the county board. “Those changes may include improved efficiencies, outsourcing (to realize improved efficiencies and reduced labor costs) and changes in service levels.”

FAAC recommends that the board “require departments to identify and implement operational efficiency improvements,” and “reduce or eliminate funding for programs that are no longer needed, are not effective, or are no longer affordable.”

The recommendations come at a time when the county will be taking on new operating expenses as a result of several major capital projects. Those projects include the Mary Marshall Assisted Living Residence, Artisphere (which opens this week) and the Columbia Pike revitalization project (which includes the assumption of road maintenance costs from the state).

The commission praised the board for balancing priorities during recent budget cycles, calling the past three budgets “fiscally prudent and responsive to pressing human service needs.”

“Arlington has been fiscally fortunate in comparison to many jurisdictions, in part because of a legacy of strong planning and prudent investments,” the report concludes. “However, the fiscal picture remains uncertain, and we believe that the recommendations contained in this report may provide additional options for the Board to consider in the development of the FY 2012 budget.”

Del. Englin Blasts State Surplus

By ARLnow.com

Del. David Englin (D), who represents parts of Arlington, Alexandria and Fairfax, says Virginia’s $404 million budget surplus is the result of “irresponsible choices and budget gimmickry.”

Englin, Vice Chairman of the House Democratic Caucus, says the surplus is the result of borrowing $600 million from the state pension trust fund and forcing state retailers to pay their July sales taxes early. That’s in addition to the $4 billion in cuts to state services that was needed to plug Virginia’s budget deficit.

“Instead of trying to score political points by claiming a surplus that isn’t, leaders of both parties ought to level with citizens who see for themselves the decline in services and quality of life,” Englin said in a statement. “A balanced budget and responsible stewardship of taxpayer dollars requires money in to equal money out, without gimmicks that cook the books and risk our future finances.”

Gov. Bob McDonnell plans to spend the surplus on roads, education, the Chesapeake Bay cleanup and a one-time 3 percent bonus for state employees, according to the Washington Post.

Official: Arlington “Positioned Well” Despite Pentagon Cuts

By ARLnow.com

Northern Virginia stands to lose $6 to $7 billion dollars through 2012 as a result of cuts in defense contracting announced yesterday, says George Mason University’s Stephen Fuller. But Arlington’s economic authority expects the impact on the county to be minimal.

“I do believe that we are positioned well for the future,” says Arlington Economic Development Director Terry Holzheimer.

Holzheimer admits that predicting the exact impact on Arlington economically is “complex,” and will not be known with a reasonable level of certainty until the Department of Defense comes out with its next budget. But, he says, the diversifying Arlington economy should be able to weather cuts in contracting as it has weathered BRAC.

“Our economy is in somewhat of a transition anyhow,” with more corporate, non-government and non-profit tenants moving in, Holzeimer said. He added that many of the contracting offices in Arlington perform lobbying and administrative functions — which are not likely to be heavily cut.

In terms of federal facilities, Holzheimer says that Arlington is especially well-positioned.

“It has zero impact on the Pentagon itself, and I don’t think it will have any impact on Ft. Myer,” Holzheimer said. He said that the other two big DoD facilities in Arlington — the Defense Advanced Research Projects Agency and the Office of Naval Research — probably will not feel much of an impact. In fact, he says, DARPA’s mission may be expanded.

Holzheimer said that Arlington also stands to benefit from a federal directive to put federal facilities in areas that are economically and environmentally-sustainable. Arlington’s transit infrastructure, pedestrian-friendliness and energy management make it an idea location.

“We are probably way ahead of everybody,” in terms of taking advantage of the directive, he said. “We’re fairly confident of our position.”

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