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Budget Proposal Includes Small Tax Hike

The new $1.03 billion budget proposed by County Manager Barbara Donnellan includes a 0.5 cent real estate tax rate increase and a 2.1 percent increase in spending.

Donnellan outlined her proposed FY 2013 budget at a work session with the County Board last night.

While the budget largely seeks to maintain existing services at current levels, it includes four key areas of increased spending: affordable housing, county employee compensation, restoration of branch library hours and Arlington Public Schools.

Library hours will be restored under the proposed budget, at a cost of $0.4 million, after being cut in Financial Years 2010 and 2011. Employee compensation will increase with merit-based raises and an increase in the county’s living wage rate from $12.75/hour to $13.13/hour. Housing will see a $1.8 million increase under the budget, which includes $0.5 million to restore lost federal funding, along with a $1.3 million hike in the county’s yearly affordable housing investment.

The budget also includes a steep $18.3 million increase in the transfer to Arlington Public Schools, which has been struggling to keep up with rising enrollment. The school transfer would total $397 million under the proposed budget. All told, the budget includes a 1.6 percent increase in funding for county operations — less than the current rate of inflation — and a 4.8 percent increase in school funding.

The increased spending will be mostly paid for by the 6.6 percent increase in real estate assessments, which will produce higher tax revenues. Another $1.5 million will be generated through Donnellan’s proposed 0.5 cent tax rate increase. Additional revenue will be brought in by a 3.4 percent increase in water and sewer service charges. The tax and fee burden on the average Arlington household will increase by nearly $120, to $6,645 per year.

“Our approach to long-term planning, Smart Growth and conservative financial management continues to provide sustainable growth,” Donnellan said at the work session. “I believe the best way to be prepared is to continue our approach of recent years — first maintaining core services, then making targeted, strategic investments to improve services, and always planning for the future.”

Donnellan proposed that the County Board advertise a 1.5 cent increase in the tax rate to give it some extra leeway during the budget process. Donnellan will formally present her budget to the Board at its afternoon meeting on Tuesday, Feb. 14. Public budget hearing will be held in March, in advance of final budget adoption on April 21.

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