Arlington County Manager’s Proposed FY 2012 Budget: No Real Estate Tax Rate Increase, No Service Cuts Restored

• Average homeowner’s tax bill up 1.4%
• $985.2 million proposed budget
• 1.9% General Fund increase, excluding schools
• More funding for social safety net, public safety

ARLINGTON, VA – February 9, 2011 – (RealEstateRama) — Arlington County Manager Barbara Donnellan today proposed a balanced budget for Fiscal Year (FY) 2012 with no real estate tax rate increase and no restoration of previous service cuts.

Donnellan briefed the County Board on her proposed $985.2 million budget for FY 2012 during a public worksession.

“We’ve come through a rough economic period with our community’s values and vision intact,” Donnellan said. “This is a sustainable budget. It is a sensible, balanced response to the gradual recovery we’re seeing.”

Donnellan will formally present the budget at the Board’s meeting on Tuesday, February 15, 2011.

Reasons for optimism

Real property tax base growth of 6.3% over the past year and renewed development interest in the County’s major corridors were reasons for “a solid basis for optimism” about Arlington’s fiscal outlook for FY 2012, Donnellan said.

Still, she cautioned, “demand for services for the neediest in our community continues to grow, and revenue streams from property, sales and other non-real estate taxes are projected to be generally flat.” The outlook for the state and national economy, Donnellan said, “is somewhat better, but still not on the sure footing we would all prefer.”

Schools funding up 4.9% to $378.2 million

The proposed General Fund budget is up 3.1% over the FY 2011 Adopted Budget. It includes a transfer to Arlington Public Schools of $378.2 million, an increase of $17.8 million in new local tax revenue, or 4.9% more than FY 2011.

The added amount for schools includes $8.6 million to cover the costs of 1,008 new students and $9.2 million in additional tax revenue for other Schools needs. The General Fund FY 2012 proposed budget, excluding the transfer for schools funding, is up 1.9% over FY 2011.

Average homeowner’s tax and fee burden to increase less than inflation

At the current tax rate of 95.8 cents per $100 of assessed value (including the sanitary district tax), the overall tax and fee burden for the average Arlington homeowner would increase 1.4%, from $6,398 to $6,487 – about $7 a month. The increase is less than the current inflation rate of 1.5% in the metropolitan area.

Business tax rates unchanged, parking rate increase proposed

The proposed budget includes no increases for personal property tax, business tangible property, business and professional licenses, or the commercial transportation tax. Fees for trash and recycling will go down 5% per year, or $18.52 per household, reflecting a decrease in costs for those services.

To fund safety net needs and additional staffing at the Emergency Communications Center, Donnellan proposed a 25-cent increase in per-hour parking rates.

The proposed budget also includes slightly more than $800,000 for a budget stabilization fund “to potentially address any uncertainties regarding the Commonwealth’s budget deliberations as well as County needs … if the economic recovery stalls,” Donnellan said.

The budget also includes a number of efficiencies that will improve County productivity and investments that will reduce operating costs.

The new baseline

“We have treated the adopted FY 2011 budget as ‘the new baseline’,” Donnellan said. The past two years have seen many reductions in County programs, with the elimination of 160 positions and savings of more than $33 million, she noted.

“While we continue to analyze whether and how to address reductions from the past two years, my budget presents my best thoughts as to current priorities in FY 2012 and includes no restoration of services that have been cut.”

Renewed investment in County workforce

Citing the need for “renewed investment in our workforce,” Donnellan said she included a merit step increase and fully funded the County’s annual requirements toward retirement and health care obligations. Staff, she said, is updating its analysis of compensation and competitiveness with other jurisdictions, and will present those findings to the Board in the coming weeks.

Next steps

The proposed FY 2012 budget was formulated after several months of discussion with the public, including a public budget forum, a meeting with County commissions and civic associations and an online budget chat and online suggestion box. Now that the Manager has made her proposal, the County Board will hold multiple worksessions and public hearings on the budget and tax proposals. The Board will adopt the budget in April. The new fiscal year begins in July.

The County Manager’s Proposed FY 2012 Budget will be available on the County website Saturday, Feb. 12, 2011. The manager’s presentation to the County Board worksession, and other documents related to the FY 2012 Proposed Budget are available now on the County website.

Arlington, Va., is a world-class residential, business and tourist location that was originally part of the “10 miles square” parcel of land surveyed in 1791 to be the Nation’s Capital. It is the geographically smallest self-governing county in the United States, occupying slightly less than 26 square miles. Arlington maintains a rich variety of stable neighborhoods, quality schools and enlightened land use, and received the Environmental Protection Agency’s highest award for “Smart Growth” in 2002. Home to some of the most influential organizations in the world – including the Pentagon – Arlington stands out as one of America’s preeminent places to live, visit and do business.

Contact: 
Mary Curtius 703-228-7943 (voice) 703-228-4611(TTY)