taxes

Some Call for Lower Real Estate Tax Rate Amid Sunnier Revenue Projections

By Jo DeVoe
Arlington County government headquarters (staff photo by Jay Westcott)

Arlington County’s projected revenue appears sunnier than when County Manager Mark Schwartz first presented his proposed budget for the 2022 fiscal year in February. 

The county can attribute this warmer outlook to two sources: the nearly $2 trillion American Rescue Plan and strong business license tax receipts, Budget Director Richard Stephenson said during a public hearing on the tax rate last Thursday. While he did not specify the revenue from the business taxes, Stephenson said President Joe Biden’s relief bill will apportion $46 million to the county.  

Combined, the influx of cash could mean funding will be restored to libraries, community centers, Arlington Independent Media and the Virginia Cooperative Extension, for example.

Schwartz’s proposed budget delays the re-opening of Cherrydale and Glencarlyn libraries and reduces support for AIM and VCE. Between 2019-20 and the proposed budget, funding for AIM had dropped by 22%, while the proposed reductions to VCE would require the organization to find new funding sources or reduce its programs. Members of the public spoke in favor of restoring funding to these programs last Tuesday.

Still, Arlington County will be leaning on real estate taxes for the lion’s share, 59%, of its revenue. Specifically, it will be relying on increasing residential real-estate taxes due to rising property values as commercial property assessments drop. 

“We’ve experienced some significant reductions to several of our tax revenues and non-tax fees,” Stephenson said. “We were fortunate this past January that real estate assessments came in slightly higher than we were originally projecting. While we experienced a decrease in commercial property assessments, new construction and residential properties increased.”

While property values are rising, Schwartz is proposing to keep the rate flat — at $1.013 per $100 of assessed value — for the upcoming fiscal year. That will mean an overall tax increase for most homeowners.

The County Board is slated to vote on this rate next Tuesday.  

Members cannot increase the rate but they could decrease it, which is something that a few Arlington residents told board members they would like to see.  

While Arlington has proposed holding its tax rate steady, nearby jurisdictions — including Fairfax County and Loudoun County — have proposed lowering or approved a lower real estate tax rate, said Audrey Clement, who is running as an independent for a seat on the County Board. 

“The impetus for tax reductions elsewhere is to provide relief to homeowners hit by rising assessments, even as the pandemic has put a lot of them out of work,” Clement told the board.

She said the county is using falling commercial real estate tax revenue to justify freezing rather than lowering the residential tax rate.

“The county will tell you it can’t afford to reduce the real estate tax rate because the pandemic has drained the commercial real estate tax revenue, but where were your real estate tax rates heading when the county was flush with revenue from corporate tenants?” she said. “They were going up.”

Meanwhile, two residents, William Barratt and Cindy Nelson, both asked the County Board to reduce real estate taxes.

Barratt said the Bluemont Civic Association, of which he is a part, passed a resolution encouraging the board to reduce the tax rate. The homeowner said he and his wife have seen a 15% increase in their taxes in recent years.

“I don’t think this is a wise idea for anyone: poor and rich,” Nelson said. “It’s just not right.”

The stormwater tax rate is set to increase, which Stephenson said will help generate $15.1 million earmarked for stormwater improvements.

Eventually, the county plans to eliminate the stormwater tax completely in favor of a fee based on how much impervious surface covers a given property, Schwartz previously said.

A higher cigarette tax rate is also being proposed that could generate $600,000. Like most of the county’s tax revenue, almost half of that will go toward Arlington Public Schools, Stephenson said.

Images (2-4) via Arlington County

Morning Notes

By ARLnow.com

Real Estate Expected to Get Pricier — “Home prices and, for the most part, sales, have continued to rise in the Northern Virginia market in the last year, even despite the pandemic, but the unanswered question is: what will happen in the future? A consensus forecast report from the Center for Regional Analysis and George Mason University and the Northern Virginia Association of Realtors aims to answer that question and, in short, the upward trends will continue.” [WTOP]

Clement Focuses on Taxes — “Frequent Arlington political contender Audrey Clement’s hat is in the ring for 2021, and she’s focusing, at least initially, on ever-spiraling higher tax burdens on county homeowners. ‘I’m running again because Arlington taxes are slated to go up again even as other Northern Virginia jurisdictions’ tax rates are going down,’ Clement said in an e-mail to supporters, formalizing her bid for Arlington County Board.” [Sun Gazette]

Candidate Misses Filing Deadline — Updated at 5:15 p.m. — Local House of Delegates candidate Matt Rogers, who was set to challenge fellow Democrat Del. Patrick Hope, reportedly failed to meet a filing deadline and may not be on the primary ballot as a result. [Blue Virginia]

Teens Encouraged to Join ‘Park Corps’ — “Work alongside Arlington’s natural resource professionals in forestry, wildlife management, education, habitat restoration and more. We’ll get real work done, all while having fun outside, building job skills and making connections with other like-minded students… Applications are due April 30. Applicants must be 16-18 years of age.” [Arlington County]

Credit Union Makes New Hires — “Arlington Community Federal Credit Union announced multiple new hires of key members of the leadership team. Each of these leaders will be responsible for significant priority strategies for the organization.” [ACFCU]

Foreclosed Rosslyn Office Building Sold — “An affiliate of The Meridian Group cast the winning bid of $58.3 million for a Rosslyn office building during Wednesday morning’s foreclosure auction just steps from the Arlington County courthouse… 1500 Wilson checks off many of the same boxes the development firm seeks with its value-add buys. There is about 121,250 square feet of vacant space in the building, and a repositioning to boost occupancy, aided by one of its real estate funds, could be in the cards.” [Washington Business Journal]

Here’s How Your Tax Dollars Are Spent in Arlington County

By Jo DeVoe

With budget planning in full swing and tax season looming near, you may be wondering what Arlington County is paying for with your tax dollars.

County officials are currently hammering out the details for the next fiscal year’s budget, which the County Board is slated to adopt on Saturday, April 17 and which will go into effect on July 1. The proposed $1.36 billion budget, which County Manager Mark Schwartz calls a “transition” budget, includes a COVID-19 contingency fund and $16.4 million in cuts.

And while the pandemic forced some revisions to the current 2020-21 budget, the pandemic has not changed the different buckets of spending by the county — from Arlington Public Schools to the Department of Parks and Recreation — and what proportion of the general fund these sectors receive.

Local taxes represent 83% of Arlington County’s overall general fund revenue. That includes the taxes you pay on real estate, vehicles, restaurant bills, retail sales, hotel stays, and if you run a business, taxes on business or occupational licenses. For next year, local tax revenue is projected to exceed $1.1 billion, increasing only $1.1 million from last year’s adopted budget, according to Arlington County’s 2022 master budget document.

In this year’s budget, about $795 million comes from real estate taxes. Levied on homes as well as apartments and commercial properties, these taxes make up the lion’s share (59%) of general fund revenue.

This year, homeowners should expect to see their bills increasing due to rising property values, although Schwartz is proposing keeping the $1.013 per $100 property tax rate flat, as he did last year. Real estate assessments showed an overall growth of 2.2% with an increase among residential properties of 5.6% and a 1.4% decline in commercial assessments.

Other revenue sources are utility rates for water and sewage; fees, like those set by the parks department; permits and fines; state and federal contributions; and some leftover money after previous budget cycles.

Where does the money go?

The county’s general fund expenditures are divided into three large buckets: county services, schools and the capital fund. In the current budget, the county services bucket — which includes a $48 million contribution to Metro — accounts for $817 million. APS received $524.6 million from the general fund and the capital fund received $3.8 million (the rest comes from carryover balances and bonds).

In the current fiscal year, the school transfer covers about 78% of APS’s total expenses, the largest share of which, accounting for nearly 78%, goes to salary and benefits costs.

Excluding schools, of the nine overall departments or sectors receiving county funding, some are almost completely funded by local taxes, while others receive more support from federal and state support or other sources of revenue.

For example, taxes fund about 90% of the budget going toward public safety, which accounts for 11% of the county’s expenses. Within that, local tax support chips in $71 million of Arlington County Police Department’s $72 million budget.

(more…)

Morning Notes

By ARLnow.com

Board Advertises Property Tax Rates — “The Arlington County Board today voted unanimously to advertise no increase in the Calendar Year 2021 base real estate property tax rate, citing the toll the ongoing coronavirus pandemic is taking on residents. The Board also voted to advertise a proposed Stormwater tax rate of 1.7 cents per $100 of assessed real property value to fund the full cost of operations and planned capital improvements to the County’s stormwater infrastructure and flood mitigation… The estimated annual impact for the average household with an assessed home value of $724,400 is $123.” [Arlington County]

Snow Falling in Arlington — Updated at 9:10 a.m. — Snow is falling in Arlington, which is just outside of a newly-expanded expanded Winter Weather Advisory. Be careful out there! [Twitter]

Business Owners Talk About Burglaries — “Metry describes the Bluemont neighborhood where his business was burglarized as safe. He doesn’t understand why his business was targeted. ‘The whole register, the iPad, the square scan, all of this was missing,’ Metry said. Surveillance footage captured at neighboring restaurant La Union shows the burglars wearing dark clothing, hoodies, masks and gloves. Jose Zelaya has owned the Mexican restaurant La Union for 21 years. Aside from a random car break-in, he said he’s never experienced any crime like this.” [WUSA 9]

St. Patrick’s Pie at Clarendon Pizzeria — “Colony Grill, Clarendon’s new family-friendly tavern, known for its gracious hospitality and famous ‘hot oil’ bar-style pizzas, will serve a special corned beef & cabbage “Bar Pie”… [f]rom Friday, March 12 through Wednesday, March 17.” [Press Release]

Reminder: Trash Collection Delayed a Day — Due to ice and snow last week, Friday’s residential waste collection will be completed today, shifting this week’s collection schedule by one day. [ARLnow]

‘Transition’ Budget Proposal Has COVID-19 Contingency Fund, Higher Taxes for Homeowners

By Jo DeVoe

Last year started out as “a good budget year” for County Manager Mark Schwartz. But nearly a year after the pandemic hit Arlington, Schwartz’s new budget proposal is more austere.

Schwartz calls the upcoming Fiscal Year 2022 budget, which is being presented to the County Board Thursday afternoon, a “transition budget.” While modestly increasing spending, his proposal reflects big pandemic-era declines in some key revenue sources.

“This budget provides us a path forward, ensuring we have a strong, resilient County government when we emerge from this pandemic,” he said after a press briefing earlier today.

For starters, the proposed $1.36 billion budget — representing a 1.4% increase in spending — includes a $17.5 million coronavirus contingency fund. This will fund vaccine distribution and testing, eviction prevention, food assistance, and will go toward supporting local businesses.

Meanwhile, Schwartz has identified $16.4 million in cuts to help close what the county describes as a budget shortfall of $26 million, down from what was initially estimated last fall to be a $50 million shortfall. The rest will be made up through one-time funding sources, he said.

The bulk of the cuts come from eliminating 56 vacant positions, which resulted from a voluntary retirement package offered in January and a continuing hiring freeze from last year.

Schwartz proposes keeping the $1.013 per $100 property tax rate flat, as he did last year. Still, the average homeowner will see a tax bill that is 5-6% higher due to rising property values, Schwartz said. Commercial property assessments, by contrast, declined this year.

Homeowners will see an average increase of $29 in stormwater taxes, reflecting a rate hike of 1.3 to 1.7 cents per $100 in property value. The increase will help generate $15.1 million earmarked for stormwater improvements. Eventually, the county plans to eliminate the stormwater tax completely in favor of a fee based on how much impervious surface covers a given property, Schwartz said.

Schools will receive 47% of the tax revenue, or $529.7 million, an increase of $5.1 million over last year.

(Updated on 2/23/21) The pandemic has saved the county money through remote work and online services, which Schwartz said will help fund other programs and services. His budget includes a one-time, $500 bonus for county employees, who will be foregoing merit-based raises.

“Our employees have gone without raises — or a vacation day — for an entire year,” Schwartz said.

After the County Manager submits his proposed budget, the Arlington County Board will vote on an advertised tax rate this Saturday. The Board will be able to ultimately adopt a property tax rate equal to or less than, but not above, the advertised rate.

The Board will then review the budget proposal and conduct a series of work sessions with each county department beginning in March.

There will be two public hearings: Tuesday, April 6, and Thursday, April 8. The final vote on the FY 2022 operating budget is scheduled for Saturday, April 17.

Certain parts of the budget may be revisited, Schwartz said, should additional federal funding become available.

Other highlights from the budget proposal include:

  • More racial equity training, money for a Restorative Justice initiative, and more funding for probation, parole and the Public Defender’s Office.
  • About $1.5 million to implement several recommendations from the Police Practices Group, especially in transitioning mental health-related work from police officers to clinicians.
  • Allowing firefighters to work a shorter week, adding transportation safety officers to the police department, and multiple positions to support the new body-worn camera program.
  • The county elections office is proposed to receive additional staff to support mail-in ballots and absentee voting.
  • Funding for the opening of the Long Bridge Park Aquatics and Fitness Center and the Lubber Run Community Center
  • Increasing the lowest base pay for county employees from $15 to $17 per hour
  • Adding Juneteenth as a County holiday
  • Delayed re-opening of Cherrydale and Glencarlyn libraries, saving $881,000
  • An additional $2.6 million in housing grants, plus $21 million in housing choice vouchers and $8.9 million for the Affordable Housing Investment Fund.

Schwartz’s budget proposal focuses affordable housing efforts on “eviction prevention and direct housing support,” but decreases county funding for Arlington’s affordable housing development fund, as the Washington Business Journal’s Alex Koma noted on Twitter (below).

“4.6% of the County’s operating budget is dedicated to housing and more than 15% is dedicated to safety net services and housing,” a slide from the budget presentation noted.

File photo

Morning Notes

By ARLnow.com

No APS Return Dates Yet — “Alexandria City Public Schools this week joined a flood of Northern Virginia school systems in setting firm timelines for reopening classrooms, vowing to welcome all students back for in-person learning by mid-March. But in Arlington, school officials aren’t committing to return dates just yet.” [Washington Post]

Summer School Appears Likely — “Gov. Ralph Northam on Friday will announce a plan to extend the school year into summer to allow students to catch up. The announcement will come during an 11 a.m. news conference, Northam said during a Thursday morning interview with Washington Post Live. No details have yet been released. ‘We’re working with our teachers, our school boards, our superintendents. It has to be a top priority,’ he said.” [InsideNova]

Karantonis Running for Reelection — “Although his announcement was temporarily derailed by a snafu too common in the Zoom era, Arlington County Board member Takis Karantonis on Feb. 3 formally kicked off his bid for re-election with comments before the Arlington County Democratic Committee.” [InsideNova]

Napoli Salumeria’s D.C. Location Closing — “The restaurant has decided not to renew their lease at their current location, so they are temporarily closing their Columbia Heights doors as they search for a new DC location. In the meantime, guests can still get the full Napoli Pasta Bar menu at Napoli Salumeria in Arlington starting next week (including dine-in). Napoli Pasta Bar will also offer free delivery for DC residents within a certain radius from Napoli Salumeria.” [PoPville]

Marymount Announces Commencement Speakers — “In mid-May, approximately 975 students will receive their degrees over the course of three days during Marymount University’s 70th annual commencement ceremonies. The newest graduates of the mission-based Catholic university will hear from three distinguished commencement speakers – influential Virginian James Dyke, Jr., entrepreneur and philanthropist Sheila Johnson and business leader Donald Graham.” [Marymount University]

Editorial: No Counterbalance Against Tax Increases — “The government’s Fiscal Affairs Advisory Commission effectively has been gelded; the Arlington County Civic Federation is trying to keep up but is not the budget-watching powerhouse it once was; the Arlington County Taxpayers Association effectively died with its leader, Tim Wise; and serious budget discussions almost never even come up within the intra-Democratic nomination contests that determine who will hold elected office.” [InsideNova]

Virginia May Abolish Death Penalty — “Virginia is poised to become the first state in the South to abolish the death penalty, a sign of ascendant liberal political power in a state that has executed more people since the 1970s than any other except Texas.” [New York Times]

BREAKING: Arlington Residential Property Values Soar

By ARLnow.com

The value of homes in Arlington County has soared during the pandemic.

Residential property values in Arlington are up 5.6%, while commercial property values slumped 1.4% from last year, according to newly-released stats. Arlington County is starting the process of mailing the new assessments out to homeowners and commercial property owners.

“Arlington’s overall property tax base grew modestly from last year due to continued residential growth despite a slowdown in some commercial sectors due to the impacts of the COVID-19 pandemic,” the county is saying in a letter to property owners. “Property values increased 2.2% overall in Calendar Year (CY) 2021 compared to 4.6% growth in CY 2020. New construction contributed to 1% of the 2.2 % overall property assessment growth.”

The sharp rise in residential property assessments shows “the continued attractiveness of our Arlington community, even as our businesses and residents face the burdens and challenges brought by the COVID-19 pandemic,” said County Manager Mark Schwartz. The average value of existing residential properties is now $724,400, up from $658,600 two years ago.

The average value of hotels, meanwhile, plummeted amid the pandemic, while apartment and office buildings increased in value — with the latter propped up by the arrival of Amazon.

“Overall commercial property assessments decreased by 1.4% over the previous year, mainly driven by a double-digit decrease in the hotel sector where operations have been significantly impacted by the COVID-19 pandemic,” the county said. “Apartment and general commercial (malls, retail stores, gas stations, commercial condos, etc.) property values saw small decreases offset by new construction. After strong growth in CY 2020, apartment property assessments increased by 0.8% overall in CY 2021. General commercial property assessments increased by 0.1% overall.”

“While many office property assessments decreased due to increases in vacancy rates and changing demand for office space, total office property values increased by 0.8% over last year,” the county added. “The overall office market tax base increased, in part, due to the increased presence of Amazon and the related development activity.”

Last year, assessments rose 4.6% on average — 4.9% for commercial properties and 4.3% for residential properties. The big rise in 2021 residential assessments will likely result in another effective tax hike for homeowners.

Last year, Arlington’s property tax rate — $1.026 per $100 in assessed value — was held steady despite the higher property values. This year, budget pressures brought on by the pandemic have prompted the county to warn of the likelihood of both budget cuts and tax rate hikes.

The height of Arlington’s budget season is set to kick off on Feb. 20, with the release of the County Manager’s proposed Fiscal Year 2022 budget. The final budget is expected to be adopted on April 17. The county’s new fiscal year begins July 1.

“The County continues to feel the economic impacts on local revenues, including the slowdown in sales, meals and hotel taxes, as well as cost increases and additional costs related to the pandemic,” the county said in a press release today. “The projected budget shortfall remains at more than $40 million, excluding the needs of the Arlington Public Schools (APS).”

Arlington Businesses Unlikely to Face Additional State and Local Tax Burden for Forgiven PPP Loans

By ARLnow.com

Earlier this year, in the depths of the economic shock caused by the start of the pandemic, the federal government handed out a half-trillion dollars worth of expedited business loans.

The Paycheck Protection Program helped businesses — mostly small businesses — keep workers employed, with loans issued by banks but funded by the feds in the amount of 2.5 times a business’ average monthly payroll costs.

The portion of the loan spent on payroll, rent or mortgage payments and utilities can then be forgiven, after the business submits an application and proper documentation.

Though there has been criticism of the rushed roll-out of PPP, and of the larger businesses that received a sizable portion of the overall funds, a search of the recipients turns up plenty of small Arlington businesses — from restaurants to gyms to others — that received PPP loans that likely saved jobs or even the businesses themselves.

There is, however, a potential downside to the loans.

If a business received a loan and kept employees on, even if they continued to lose money, they’re now facing the reality that — absent a proposed fix from Congress — they may face extra tax liability and have to dig into emptied pockets at tax time next year. That’s because the expenses paid for by the forgiven portion of the loan are, under current guidance, not able to be deducted, effectively making the forgiven loan federally taxable for many businesses.

Fixes have been proposed by Congress as part of new coronavirus relief packages, but so far nothing has passed.

On the plus side, there is a bit of good news for businesses in Arlington. Officials from both the county and the Commonwealth expect that forgiven loans will not be taxed on a state or local level.

In the case of the county, there’s a question of whether the forgiven portion of the loan would be included in the “Gross Receipts” that are subject to the Business, Professional, and Occupational License (BPOL) tax, which is generally $0.36 to $0.18 per $100 of revenue — not profit, as is the case for federal corporate taxes.

William Burgess, an attorney with the Arlington Commissioner of Revenue’s office, tells ARLnow that the county does not currently think that forgiven loans are taxable.

“Per Virginia Code § 58.1-3732(A)(4), the loan proceeds received by a borrower are excluded from gross receipts,” Burgess said. “Therefore there is no provision addressing what happens if the loan is forgiven and no [state tax documents] interpreting this section.”

“Given that the statute expressly exempts loan proceeds and does not explicitly address forgiveness, our office believes that the loan proceeds do not become taxable upon forgiveness,” he continued.

Virginia officials, likewise, said the current expectation is that forgiven loans will not be taxed by the Commonwealth. An annual tax “conformity” bill that is expected to be passed by the state legislature should ensure that.

“The Virginia General Assembly would need to enact legislation advancing Virginia’s date of conformity in order for the state to adopt the Paycheck Protection Program loan forgiveness provision set forth in the CARES Act,” said Virginia Tax spokeswoman Stephanie Benson. “If the General Assembly conforms to this provision, the forgiven loans would not be subject to Virginia income taxation.”

“It is common practice for the Virginia General Assembly (GA) to adopt a conformity bill each session, and the GA generally conforms to the majority of federal tax provisions,” Benson noted.

Photo by Pepi Stojanovski on Unsplash

County Missing $10 Million in Delinquent Taxes Amid Pandemic

By Jo DeVoe

In March, Arlington County was on-track to set a new record low for tax delinquency rates.

Then, the coronavirus hit.

“As the pandemic unfolded, we got further and further from our goal, which was to be expected,” Treasurer Carla de la Pava told the County Board during its recessed meeting on Tuesday.

Delinquency rates had decreased by almost half since 2014, but COVID-19 erased two years of record-setting lows. The County is currently out nearly $10 million in uncollected tax revenue, de la Pava said.

For every 10,000 tax-paying residents and business, de la Pava had aimed to have only 17 fall behind, but when the collection year ended on Aug. 14, that proportion increased to 22. She told the County Board that next year, she predicts it will be “difficult, but achievable” to keep the rate under 30 delinquent residents and businesses per 10,000.

“We have our work cut out for us,” she said. “We started this collection year with the highest rate of delinquencies since I became treasurer,” or about $14 million.

The “elephant in the room” that contributed the most to the spike is delinquent real-estate taxes, which have never been higher in the County’s history, de la Pava said. Overall, the County is missing more than $5 million in property taxes for homes, apartments, hotels and businesses.

The highest percentage of households that have not paid their property taxes are clustered in the 22207 zip code: the northernmost part of North Arlington that includes the Cherrydale, Country Club Hills and Yorktown neighborhoods.

The highest percentage of businesses that have not paid their property taxes are centered in the 22202 zip code (the Crystal City, Pentagon City and Arlington Ridge neighborhoods) and 22206 (the Shirlington, Fairlington and Long Branch Creek neighborhoods).

Taxes on property used for business are also up dramatically, with number of delinquencies concentrated in the 22202 zip code. The amount owed along the Rosslyn-Ballston corridor, however, exceeds all other zip codes combined, de la Pava said.

This June, the treasurer’s office put a number of hotels and big businesses on Taxpayer Assistance Program loans so they could pay their taxes over 10 months, from August 2020 to May 2021. This came after her office offered a two-month deferral this spring that mostly benefited hard-hit restaurants and hotels.

John Marshall Bank, which partners with the county on the short-term loans, lowered its rates to make these repayment plans more affordable, she said.

“We prevented almost $1 million in going delinquent through TAP loans from John Marshall Bank,” de la Pava said.

To encourage safe and timely payments this year, de la Pava said her office added a temporary location this September and encouraged people to pay online, resulting in an 11% increase in online profiles.

The County Treasurer said she found another bright spot in vehicle taxes, which reached the second-lowest delinquency rate in Arlington’s history this year. Outreach, payment plans and automatic billing contributed to the lower delinquency, she said.

The Columbia Pike corridor, or the 22204 zip code, has the highest concentration of vehicle delinquencies, amounting to $1.1 million.

The treasurer’s office drafted 400 payment plans for vehicle taxes, saving $600,000 from going delinquent, de la Pava said.

Images via Arlington County

County Budget Cuts, Tax Hikes on the Table Next Year

By ARLnow.com

(Updated at 4:45 p.m.) Facing a potential $41-56 million budget gap, the Arlington County Board is signalling that service cuts and tax rate hikes may be included in next year’s budget.

At its Tuesday meeting, the Board provided guidance to County Manager Mark Schwartz on the upcoming Fiscal Year 2022 budget, covering July 2021 through June 2022. Underlying it all is a big drop in tax and fee revenue caused by the pandemic.

“Our challenge in Fiscal Year 2022 will be to support our community as it continues to deal with an unprecedented medical, economic and educational emergency, even as the County faces continued fiscal uncertainty,” Board Chair Libby Garvey said in a statement.

“Our guidance to the Manager today starts what I expect to be a difficult conversation with our community about priorities, cuts to programs and services, and potential tax increases over the coming months, as we focus our limited resources on defeating this deadly virus, preserving our social safety net, protecting public health, and supporting our students and those in our community who face food and housing insecurity,” she said. “While the budget situation is serious, Arlington’s financial fundamentals remain strong.”

In a press release, the Board detailed what they want Schwartz to include in his proposed budget next year, including:

  • “Reducing programs and services where necessary”
  • “Consider a real tax rate increase, increased cigarette taxes, and a plastic bag tax”
  • “Fund affordable housing, with a primary focus on preventing evictions and providing housing grants”
  • “Food assistance, COVID-19 testing, contact tracing, personal protective equipment, and an anticipated vaccine program for the virus”
  • “Funding… to implement Rank Choice Voting in Arlington…  and the Police Practices Group’s recommendations”
  • Funds to open the new Long Bridge Aquatics and Fitness Facility, and a recommendation on when to open the new Lubber Run Community Center
  • An evaluation of “the advantages and disadvantages of moving to a utility model for funding stormwater management”

The Board’s guidance also calls for funds to be set aside “to support collective bargaining implementation,” following the May 1, 2021 implementation of a new Virginia law that allows localities to recognize and negotiate with public employee labor unions.

While reserve funds and federal coronavirus funds may help close up to half of the anticipated budget gap, Schwartz and his staff told Board members that difficult decisions may still be necessary. County revenue from commercial real estate taxes, as well as sales and meals taxes, is down significantly.

“The bottom line” is that “there is a significant gap to close,” Arlington County Budget Director Richard Stephenson said. “It will require some tough choices in the development and adoption of the FY 2022 budget.”

Board member Matt de Ferranti asked the public to be aware that the Board is “seeking options.”

“As much as we might wish we were fully immune from economic challenges, we are not,” he said. “There won’t be good options — there will only be least bad options.”

Board member Christian Dorsey said the Board does not take the possibility of tax increases lightly, and cautioned against a budget that prioritizes other aims above the marginalized in Arlington, who have been disproportionately hit by the pandemic.

“It’s certainly not lost on me or any of you that we have a really blunt tool in adjusting real-estate taxes to raise revenue,” he said. “It’s a blunt tool that can cause harm to the people you’re seeking to try and help with other government expenditures and services.”

(more…)

View More Stories