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Peter’s Take: Manager’s Budget — Good Short-Term, Headwinds Long-Term

by Peter Rousselot March 1, 2018 at 2:45 pm 0

Peter’s Take is a weekly opinion column. The views and opinions expressed in this column are those of the author and do not necessarily reflect the views of ARLnow.com.

On February 22, Arlington County Manager Mark Schwartz presented his proposed FY 2019 Annual Operating Budget. It’s balanced at the current real estate tax rate.

Some aspects of the manager’s budget are commendable, particularly the short-term focus on core services, coupled with many sensible cuts, to close a $20.5 million budget gap.

Other aspects are troubling, exposing a lack of long-term financial planning relating to many of the same core services.

Commendable

The manager’s budget appropriately focuses on several core service areas, including:

  • increasing public safety personnel salaries and benefits to remain competitive in recruitment and retention
  • Metro
  • Arlington Public Schools (APS)

The manager notes his proposed budget “includes the first installment of a multi-year plan to gradually reduce the workweek for firefighters.”

The manager observes that his budget meets the Metro request “for a 3 percent increase in operating funding, while relying on a comprehensive solution (among Virginia, Maryland, and the District) to meet our capital obligations.”

His budget “meets the commitment to Arlington Public Schools articulated as part of the Revenue Sharing Principles (local taxes split with 53.4 percent to the County and 46.6 percent to APS) and provides an additional $13.4 million in ongoing funding compared to FY 2018.”

Troubling

Both the manager and the APS superintendent dance around the operating budget implications of APS’ projected enrollment growth. That’s troubling. This is an example–but only one example–of both the manager and the superintendent failing appropriately to engage the community regarding many important long-term financial issues at stake.

The manager states: “increasing taxes each year to meet school enrollment needs is not sustainable.” He’s right, but he fails to provide the community with a quantitative explanation why increasing taxes each year to meet school enrollment needs is not fiscally sustainable.

Moreover, he has not provided the community with a manageable number of alternative options that are fiscally sustainable. Finally, the manager should explain why continuously increasing APS’ current 46.6 percent share of local tax revenues is not sustainable.

Meanwhile, the superintendent says that because APS is on pace to grow to 30,000 students by 2021, “we’ve got to begin to think about a sustainable future.” He also fails to provide the community with a manageable number of alternative quantitative options that achieve a fiscally sustainable future.

The time merely “to begin to think” about these financial issues is over. The time to think about these financial issues extensively, involving the community at every stage of the process, is now!

An over-simplified example is illustrative. The superintendent’s proposed operating budget assumes per-pupil expenditures of $19,235. APS’ latest enrollment projections show enrollment growing from 28,020 in 2017 to 32,666 by 2027. If that projected enrollment growth of 4,646 students is multiplied by the assumed per-pupil expenditures, that would add $89,365,810 of expenditures into the operating budget by 2027 solely to support the increase in enrollment.

Conclusion

It is highly unlikely that County tax revenues will rise sufficiently by 2027 to cover an $89,365,810 increase in spending solely to support an increase in current APS enrollment. What are the major alternative options available to address such a projected budget gap, and which ones command the greatest community support?

The County Board and School Board should collaborate quickly to present the major alternative financial options to the community, inviting the community to say which options the community prefers.

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