As Arlington County eyes another possible tax increase this fiscal year, County Manager Mark Schwartz warns that trimming the county $1.65 billion budget would be no small task.
From the rising costs of compensation to funding commitments that can’t be altered in the short term, Schwartz suggested that cutting costs to fill an anticipated budget gap of $30 to $40 million — about 2% of Arlington’s $1.65 billion budget — isn’t as easy as some might think.
Schwartz, who this month begins his 10th year as top county staffer, can, of course, only propose. It is the five-member County Board that will have the final say.
With leaders soon expected to be weighing possible cuts to programs and personnel, Schwartz outlined the “tough choices” county staff and the Board will face as they attempt to balance this year’s budget.
‘I’m ready to offer choices’
“I’m ready to offer choices to the Board and community about cutting programs,” Schwartz said during a December presentation to the Arlington County Civic Federation.
“The Board is going to be faced with some tough choices — everything we have in the budget has a constituency,” he said.
During a November staff briefing of County Board members on the local fiscal outlook, Schwartz and personnel from the Department of Management and Finance noted the reality that more than half the county government’s annual budget can’t be touched in a quest to find savings.
Items in the current budget that are non-discretionary include debt service ($84.6 million), federal/state funds ($71.5 million), and support for the Metro system ($49.8 million).
The largest single item on the cannot-touch list was the $639.7 million allocated to Arlington Public Schools via a longstanding agreement that sends 46.8% of General Fund revenue to schools.
Although the percentage has changed over time, the school-county revenue-sharing deal in place for several decades has enabled Arlington leaders to avoid recurrent budget battles between the governing body and school officials.
Such battles are a frequent occurrence in many other Virginia localities.
The no-questions-asked funding stream, which makes up about 80% of the school system budget, also has helped Arlington attain the distinction of spending more per student than any other school division in the D.C. suburbs.
Where would cuts come from?
Areas where there is budget discretion were laid out in figures Board members received in November, using FY 2025 numbers.
Among them: the Department of Environmental Services (with a $109.9 million fiscal 2025 budget), county police ($89.2 million), fire ($77 million), parks ($42.7 million), sheriff ($41.7 million), libraries ($19.4 million) and economic development ($10.2 million).
Add those and all other departments together, and the amount of discretionary funding for fiscal 2025 totaled about $673 million, or about 40% of the $1.65 billion.
Of the $673 million, about $520 million relates to personnel costs. And as Schwartz noted, every department, and virtually every program within a department, has constituencies — among the public, Board members and staff itself.
Any proposed cut Schwartz might suggest, from closing a library branch to trimming funding to the arts, likely would bring out legions of advocates at the government’s annual budget hearing.
‘Responsible’ rate of growth?
Schwartz told Civic Federation delegates he was anticipating a drop of more than 10% in the assessed valuation of commercial real estate this year.
“I think it is going to be repeated year over year for the next three or four years, at least,” he warned. “There’s no way to manage around that.”
For decades, Arlington leaders were able to rely on tax revenue from commercial properties as the golden goose allowing high levels of government spending without causing more angst among homeowners.
But last year, most owners of residential properties saw their assessments go up, and for the first time since pre-pandemic, Board members ladled a tax-rate increase on top.
“We had some pain for homeowners last year. I assume we’re going to get some more pain this year,” Civic Federation president John Ford said.
The county manager did not contradict him on that. But Schwartz did contend that the county government’s track record on the overall tax burden imposed on homeowners wasn’t that bad, comparatively.
“Against the state of inflation, I think we’ve been pretty responsible,” Schwartz said.
That comment drew a retort from Suzanne Sundburg, the Civic Federation’s revenues-and-expenditures committee chair (but speaking on her own behalf).
“Responsible compared to whom?” she asked. “Alexandria? Imelda Marcos?”
Sundburg, who since the death of Arlington County Taxpayers Alliance president Tim Wise has been one of the few to publicly challenge the Arlington government on spending issues, says the county’s expanding budget is the result of a number of factors.
“I cannot blame the manager alone,” she told ARLnow. “It is ultimately the responsibility of the County Board to ensure that money is being used effectively and efficiently.”
She acknowledged that finding places to cut was not as easy as some might think, but said that was due to choices being made by county leaders.
“With school spending off the table and the new union contracts driving compensation costs ever higher, that doesn’t leave a lot left on the table for cutting,” Sundburg said.
“Throw in Metro funding obligations, and you are approaching 70% of existing spending deemed untouchable, leaving all the painful cuts — if cuts are even to be considered — to popular programs like parks and recreation, libraries, social services, etc.” she said.
Too much power in staff’s hands?
Conspiracy theories about staff leading Arlington’s elected officials to rubber-stamp predetermined outcomes are “overblown,” Schwartz said — although he acknowledges it is a common refrain in the community.
“I’ve heard that a lot,” Schwartz said when pressed by a federation delegation on whether staff has too much power.
“Our obligation is to present options to the Board,” Schwartz said. “There’s always more than one option. I do a lot of consultation [with Board members]. If anything shows up that is a surprise to the Board, I get kicked in the butt on it.”
He acknowledged, however, that getting a final decision from those in elected office is not always easy.
“Sometimes with five board members you have 10 opinions — that can be a real challenge,” he said.
One recent example of Board members not following a staff recommendation came in November, when elected officials nixed a proposed increase in rates towing companies could charge.
Community engagement gets mixed grades
How well does the county government do in communicating its plans to the community, and in providing opportunities for affected parties to offer feedback? Some consider it to be very good.
“Under Mark’s tenure, the public-engagement aspect [has been] A-number-one,” said Duke Banks, a former Civic Federation president.
He pointed to efforts under Bryna Helfer, a former assistant county manager in charge of the communications apparatus, as a champion in supporting engagement.
Banks’ praise for government efforts was hearty but not all-encompassing. “There was obviously some slippage here and there,” he said of efforts communicating with the public.
The Civic Federation at times has been a sharp critic. Its membership in 2023 adopted a stinging resolution targeting what some saw as an imperialistic attitude of county leaders toward those who lived in the community.
The initial resolution, sponsored by a number of former Civic Federation presidents (including Banks), was toned down before the final version was adopted. But it remained a very public rebuke.
In some ways, the county manager appears to be in a no-win situation in terms of involving the public in decision-making.
“I get kicked in the pants sometimes by my department heads about all the emphasis I put on community engagement,” Schwartz said, while acknowledging “it’s not perfect [and] it never will be perfect.”
Where does the budget process go from here?
The local government will release 2025 property assessments later in January, providing a benchmark for future budget deliberations. Schwartz himself will then present a draft budget in February.
After several months of discussion and two public hearings, Board members will adopt a final spending plan in mid-spring.
The fiscal 2026 budget goes into effect July 1, although any changes to the real-estate tax rate will be retroactive to the start of the year.
For those wishing to participate, the county government has an online survey open to gather input on budget priorities.
Rising through the ranks to top stop
It’s something of an inside community joke that, in Arlington governance, every year since the dawn of time has been described as “difficult” when it comes to the budget process.
Schwartz certainly has seen his share of them.
Like two of his three immediate predecessors as manager, Schwartz rose up through the ranks of the Arlington government before being tapped to lead it. Ron Carlee (2001-09) and Barbara Donnellan (2010-15) both had extensive experience as department heads with budgeting responsibility prior to ascending to the top of the staff pyramid.
In between Carlee and Donnellan came Michael Brown, who in 2010 was recruited from Savannah, Ga., to take the helm. He lasted only about six months before Board members decided it wasn’t a good fit.
Speaking to Civic Federation delegates last month, the current county manager — whose tenure in Arlington began in a budget-focused staff position in 2005 — gave his assessment of what is to come in 2025.
“I’ve done [many] budgets in my lifetime,” Schwartz said. “This is not going to be the worst of them — [but] certainly in the lower half.”
