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 ARLnow.com.
On Tuesday, the County Board approved the FY 2013 closeout and re-appropriation measure.
According to the report accompanying the County Board’s agenda, tax revenue once again came in well ahead of predictions, by $27.9 million. The largest contributor to the surplus was real estate revenues, to the tune of $15.3 million. In percentage terms, real estate tax revenues ran 2.6% ahead of budgeted amounts.
In April, the County Board passed a 3.6 percent real estate tax increase. To justify it, the County Manager and the County Board cited a FY 2014 budget “shortfall.”
As it turns out for the 2013 fiscal year, and virtually every fiscal year in recent memory, the county underestimated the revenues that would be generated by the tax rate. Even if you agree with all of the spending priorities passed by the County Board in its annual budget, the surplus suggests your real estate taxes alone could have been 2 percent lower. And just as in previous years, the $27.9 million underestimation of all revenues was enough to actually lower your real estate tax rate even further.
The board also spends millions each year reclaimed from budget savings — adopting the federal government approach of “use it or lose it.” For FY 2013, the budget over-estimated the costs of government activities for the year by $25.3 million, but the money was still spent on other items. Among those items was $1.7 million in additional subsidies to the Artisphere, which was supposed to become self-sufficient by now.
In so doing, the board can say that they spent all that was budgeted in the prior fiscal year. This keeps the baseline of spending on an upward trajectory in order to help create another budget “shortfall” for FY 2015. You can find more information for next year’s budget in this report. County Manager Barbara Donnellan preliminarily estimates the “shortfall” will be $7.7 million. However, if you used this year’s actual surplus of excess revenues plus savings for comparison, that “shortfall” could actually become a $45.5 million surplus.
Granted, the county manager’s report also notes the schools could have up to $16 million in additional costs caused by higher enrollment. However, based on the consistent underestimation of revenue and over-estimation of costs, we can safely assume the FY 2015 revenues will more than cover school needs. And, it will still leave us with room to spare without necessitating another tax increase.
The board did give its budget guidance on Tuesday as well, and did not recommend a tax rate increase for next year. At the same time, your tax bill will still rise with your assessment by an average of $300 per homeowner. And, the Board regularly ignores its initial guidance.
Chairman Tejada’s comments that tax increases were still on the table in the budget process means the chances anyone on the board will propose the real estate rate cut the county could afford are somewhere south of slim-to-none. But, it is important to understand these numbers if the board comes to you in the spring and asks for another tax rate increase.
Mark Kelly is a former Arlington GOP Chairman and two-time Republican candidate for Arlington County Board.
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