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The Right Note: Did You Know?

The Right Note is a weekly opinion column published on Thursdays. The views and opinions expressed in the column are those of the author and do not necessarily reflect the views of

Mark KellyAs the fiscal year winds down here in Arlington, I wanted to touch on two lesser known facts about the budget process.

Fact Number One: When the County Board passed the tax rate increase last month, it applied retroactively to January 1st of this year, not to the next fiscal year which begins July 1st.

If you have a mortgage, that new obligation is settled between the County and the financial institution you make payments to each month. Chances are your escrow account has more than enough cushion to cover the difference. If you have paid off your property, you will be writing the bigger checks immediately to cover the costs. If you rent, your landlord has probably built this assumption into your rate increases as your leases are up for renewal.

Fact Number Two: The county underestimates revenue collections every year for the budget that is approved. For fiscal years 2010 to 2012, the average was $37 million – roughly 3.5 percent on average each year.

It is more than a bit disheartening that every year we bring in more revenue than is estimated, yet we are always hearing about budget “shortfalls” as the reason to increase taxes.

What does the County Board do with the excess revenue? They spend it on new projects outside of the regular budget process in what is known as the “close-out” process. The close-out process is in place primarily to allow the Board to re-allocate millions of dollars that have been budgeted for, but not spent, for a variety of reasons.

If the Board had applied all of the excess revenue in last year’s close-out to offsetting this year’s budget, we could have seen our tax burden held steady without cutting one penny from the services promised as part of this year’s adopted budget. The Board did carry forward $12.9 million from last year’s close-out process to apply to this year’s budget, so I guess we can be grateful that our taxes were not raised even more.

It is still a few months before the County Board will close the books on fiscal year 2013. The unfortunate reality is that the close-out process will once again result in additional spending projects rather than giving us a little tax relief.

The County Board should start by explaining why county staff consistently underestimates revenue year after year. The Board should commit to end the use of the close-out process to spend money on items that were not vetted as a part of the regular budget process, nor to raise total spending for the year over the adopted fiscal year budget.

In short, the Board should confine its close-out decisions to re-allocating already budgeted spending and treat the adopted budget each year as a ceiling, not a floor.

Mark Kelly is a former Arlington GOP Chairman and two-time Republican candidate for Arlington County Board.

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