The Arlington County Board unanimously approved a balanced $1.5 billion annual budget on Tuesday night.
The FY 2023 budget represents a 7.6% revenue and spending increase over the current fiscal year, which ends on June 30.
The new budget follows County Manager Mark Schwartz’s recommendation to hold the real estate tax rate steady at $1.013 per $100 of value, which is an effective tax hike of 5.3% on homeowners given a steep rise in assessments amid a hot local real estate market.
Weakness in commercial property values, given the pandemic and work-at-home trends leading to elevated office vacancy rates, put pressure on the revenue side of the budget. Assessments were flat for commercial property, which makes up more than a third of the county’s property tax base.
“Although I am glad that we could hold to our property tax rate… among the lowest in the region, I know that we all would prefer to be in the situation of our peer jurisdictions who are less dependent on commercial revenue sources and are therefore entertaining rate cuts this year,” County Board Chair Katie Cristol said at the meeting.
She continued: “But by investing in our people, specifically investing in retention and recruitment for the positions and divisions where quality of service is most threatened” — including law enforcement and the fire department — “and prioritizing the urgent as well as important issues of housing equity and climate, I am optimistic that this budget will be one that doesn’t just bridge the pandemic but begins our journey on the other side.”
Increased costs attributable to inflation, meanwhile, while not mentioned in the county press release (below), will likely put pressure on the expense side of the budget.
The new budget represents a 50% increase in spending over the FY 2012 budget approved 11 years ago, when the county budget first hit the $1 billion mark. During that time, the U.S. has seen inflation, as measured by the Consumer Price Index, of 29%, while the county has seen a population increase of roughly 15%.
The FY 2023 budget largely follows Schwartz’s proposed budget. It includes pay hikes for county employees, and even steeper pay increases for the police department, Sheriff’s Office and fire department.
Other local priorities targeted for increased spending include affordable housing and the environment, with the budget funding a new “Office of Climate Coordination and Policy.”
The climate office will be run out of the County Manager’s office and will “focus on advancing key climate policies and strengthen[ing] interdepartmental coordination across government.”
While many will see a tax hike given rising property values, vehicle owners will see a bit of relief with the new budget.
“The budget also includes vehicle tax relief by adjusting the assessment tax ratio to 88 percent of a car’s value and the elimination of the regressive $33 Motor Vehicle Fee for Arlington residents,” notes a county press release. “These changes are in response to a surge in vehicle valuations, directly related to supply chain issues and rising market prices impacted by the COVID-19 pandemic.”
More details about the budget, from the press release, are below.
Adopted FY 2023 Budget Looks Beyond Pandemic with Focus on Employees
The Arlington County Board voted unanimously Tuesday, April 26, to adopt a $1.50 billion balanced General Fund Budget for Fiscal Year 2023. The Adopted Budget leaves the base real estate tax rate unchanged at $1.013 per $100 of assessed value. The FY 2023 budget begins to look beyond the COVID-19 pandemic with a focus on employee compensation, the environment, housing, and public safety, among other priorities.
“After two years of minimal salary increases and a rising cost of living, this budget recognizes the hard work of our employees, which was so critical throughout the pandemic,” said County Board Chair Katie Cristol. “We made compensation our top priority in this budget, to give meaning to all the ‘thank you, essential workers’ sentiments expressed over the past two years. This budget also prioritizes new investments that will create unprecedented energy and focus in the key policy areas of climate action and affordable housing, building on and amplifying existing efforts to create a more sustainable, equitable Arlington.”
Investing in Community Priorities
The County Board approved funding for FY 2023 is the result of months of study, evaluation, and input from the public. Core investments in the Adopted Budget include:
- Employee Compensation: The budget includes merit increases of 5.25 percent for general employees. To improve recruitment and retention, the Fire Department and Sheriff’s Office uniformed employees will receive an 8.5 percent increase and uniform police will receive a 13.5 percent increase. One-time incentives for retention, referral, and signing bonuses will also be provided for hard-to-fill positions across the County. The budget also includes a 5 percent increase to the minimum salaries of County employees to improve recruitment, and a one-time bonus of $1,600 gross. Funding is also included to begin implementation of the collective bargaining ordinance.
- Environment: The budget brings new investments of more than $4.65 million to execute climate resilient programs to combat climate change. The adopted budget includes the creation of the Office of Climate Coordination and Policy (OCCP) in the County Manager’s Office to focus on advancing key climate policies and strengthen interdepartmental coordination across government. OCCP will also work in partnership with the Arlington Rethink Energy Team (AIRE) team toward successful implementation of the County’s climate goals with businesses and residents across our community. The budget also includes $1 million for an Arlington CEP (Community Energy Plan) Action Fund to address emerging opportunities to affect climate change. These investments could include additional electrification of County vehicles, energy efficiency projects, and the advancement of the Community Energy Plan (CEP).
- Affordable Housing: As one of the County’s top priorities, this budget commits funding for eviction prevention and increasing housing support, with $14.3 million in housing grant support and $3.4 million for permanent supportive housing. The budget also includes $23 million in federal funding for housing choice vouchers and $18.7 million for the Affordable Housing Investment Fund (AHIF). Two new positions are being created to provide additional capacity for housing development and oversight of the County’s committed affordable housing units.
- Public Safety: The adopted budget reduces the Police workweek by 2.5 hours to help with retention and recruitment and provide a better work-life balance. This will be the first full year of the Fire Department’s Kelly Day, which increased staffing levels to allow firefighters to work a 50-hour week schedule rather than a 56-hour week allowing us to remain competitive in the region. The budget also includes funding for the implementation of the Police Practices Group recommendations, including the continuation of the Community Oversight Board and crisis intervention support.
- Schools: The County Board also added $8.4 million of one-time funding for Arlington Public Schools. The total FY 2023 transfer to the Arlington Public Schools from the County is $584.4 million ($563.9 million in ongoing, a $36.8 million increase or 7 percent compared to FY 2022 and $20.5 million in one-time funding).
Personal Property Tax Relief
The budget also includes vehicle tax relief by adjusting the assessment tax ratio to 88 percent of a car’s value and the elimination of the regressive $33 Motor Vehicle Fee for Arlington residents. These changes are in response to a surge in vehicle valuations, directly related to supply chain issues and rising market prices impacted by the COVID-19 pandemic.
The Board held the budget and tax rate hearings in person and virtually, with dozens of residents participating. Hundreds of comments on the budget were made part of the public record and considered by the Board during its deliberations. The new fiscal year begins on July 1, 2022.
Brandi Bottalico contributed to this report