The Right Note: Time to Revisit TIFs

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

Earlier this week, a story appeared here on ARLnow posing a question of whether the County Board should require developers to make a contribution to schools as one of the community benefits required for additional density.

Though the exact number varies from year to year, roughly 46 cents of every tax dollar in Arlington goes to the school system per a loosely defined revenue sharing agreement. One could argue developers could do more for schools, but for each additional tax dollar generated by new development, the schools already receive a significant ongoing, rather than one-time, benefit.

This ongoing property tax revenue benefit works this way except for the two areas operating under a Tax Increment Financing District (TIF). Arlington currently has two TIFs in Crystal City and along Columbia Pike — not coincidentally in the areas that would have been impacted by the now-cancelled streetcar system.

When there is a TIF in place, a percentage of future tax revenue is set aside to be used in the areas covered by the TIF. In other words, those tax revenues are no longer shared with the schools, or the rest of the general budget, in the same way as they are throughout the rest of the county.

For the Crystal City TIF, 33 percent of additional revenue moving forward from January 2011 will stay in Crystal City to pay for infrastructure. Along Columbia Pike, 25 percent of additional revenue will be used for affordable housing on the Pike.

By taking these revenues off the table for decades into the future, it builds in an automatic squeeze on the schools budget, in addition to reducing money available for roads, parks, public safety and other services. And, if past history is any indicator, the solution will be for the County Board to come to the taxpayers throughout the county and tell us they have no choice but to raise all of our taxes again.

Now that the streetcar project has been tabled, it is time for the County Board to revisit the the two TIFs. The Board should eliminate them altogether and fund any needs through the regular budget and bonding processes. A less desirable option is to debate a reduction in the percentages that were originally calculated with the streetcar in mind.

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