The Hurtt Locker: Don’t Let COVID-19 Bust the County Budget

The Hurtt Locker is a biweekly opinion column. The views expressed are solely the author’s.

“The mission of the County Manager’s Office is… to ensure high-quality services, with outstanding customer service at a good value to taxpayers; [and] to foster economic and fiscal sustainability…” – County Manager’s Office Mission

COVID-19 could cause Arlington county to raise taxes and dramatically grow the budget in times when revenues are uncertain. The county should instead stress fiscal prudence and tread lightly, starting from zero, and make targeted cuts to preserve room to respond to COVID-19.

Arlington County Manager Mark Schwartz touted his proposed Fiscal Year 2021 budget as a “good news budget” following “a few years of tight budgets, involving tax rate hikes and a handful of county staff layoffs,” according to ARLnow coverage just six weeks ago.

Barely a month later, county officials were scrambling to rethink the budget in anticipation of the economic fallout of the pandemic. County leaders are indeed facing unprecedented economic uncertainty. I don’t envy the situation our local elected leaders face. I stand with and support them during these challenging times, despite the policy and philosophical differences between us.

Discussing the FY2021 budget in recent coverage from ARLnow, County Board Chair Libby Garvey said: “We need a budget by July 1… We don’t know what our revenues will be… [and] We don’t know what our expenses will be.”

The breakdown of Arlington County revenue sources is alarming and makes a compelling case to reduce spending.

Fifty-eight percent of county revenue comes from Real Estate, and COVID-19 will surely impact this portion of the revenue stream. As recently as February 25 (ages ago now), Garvey floated the potential of a tax rate cut, given rising property assessments and the economic activity around Amazon HQ2, which is still chugging along. The tax rate cut would provide relief to struggling property owners and should move forward.

At the time, County Manager Schwartz proposed a 2.9% increase in spending (~$40.6 million over FY 2020) without a rate hike. It would be prudent to scrap the proposed budget increase and shore up essential government services, because we will likely spend millions to right the ship in the wake of COVID-19.

The other 42% of the county’s revenue drips in from more than a dozen sources, including Personal Property (8%), the State (6%), BPOL and Service Charges (5% each), and lesser taxes, which could become more important in the FY2021 discussion. What will a near-shutdown of the economy do to local sales tax and transient occupancy tax revenue? How many businesses will shutter permanently?

County leaders expect financial assistance from state and federal government, but it is unlikely those increases will completely cover the revenue losses brought on by COVID-19. The County recently accepted $420,926 in state grant funds to continue ART service (which has been complimentary for riders during most of the current crisis), but this funding is still part of the FY2020 budget.

The county’s revenue stream is at risk, and relief is uncertain. Tax relief might impact short-term revenue, but it would help protect it in the long run. And in any case, we should re-evaluate all spending with a critical eye.

The nature of work sessions and public hearings has also changed, given restrictions on how many people can gather and for what purposes. The County should make it as easy as possible for Arlingtonians to continue to be part of the process. Some localities have begun hosting public discussions on Zoom and other online platforms, where feedback can be provided immediately from those viewing the proceedings. These are good measures that increase transparency and access.

Every crisis presents both a danger and an opportunity. Plenty will be written about the dangers — human, economic, and otherwise — but we can’t lose sight of the opportunities. Both Arlington County Government and Arlington Public Schools were forced to change the way they operate in the last six weeks, quickly and with little notice.

Some changes — efforts to streamline services or provide those services in a different way — could lead to more efficient government and long-term cost savings. County employees should be incentivized to identify these opportunities and ensure they are continued even after this pandemic is over. A “penny plan” (cutting 1% across the board or staggered 2-3% cuts to specific departments) could help ease fiscal tension for FY 2021.

But the responsibility shouldn’t lie solely with county employees. We should clamor for efficient local government and identify opportunities for government to work smarter for taxpayers. As a member of the “Arlington Neighbors Helping Each Other Through COVID-19,” I’ve seen the compassion and ingenuity that has brought our community together to address personal, fiscal, and institutional gaps during these challenging times. We must continue to flex this civic muscle when we make it through this present crisis.

We should demand “good news” budgets every year that get basic services right and live up to the County Manager’s Office Mission, regardless of the economic forecast. And we can continue to make Arlington “a diverse and inclusive world-class urban community” without letting COVID-19 bust the county budget.

Matthew Hurtt is an 11-year Arlington resident who is passionate about localism and government transparency and accountability. Hurtt is a member of the Arlington Heights Civic Association and was previously the chairman of the Arlington Falls Church Young Republicans. Hurtt prides himself on his ability to bring people of diverse perspectives together to break down barriers that stand in the way of people realizing their potential. He is originally from outside Nashville.