Arlington County’s tax revenue was millions of dollars short of what was expected in the first months of this fiscal year, resulting in cutbacks on some expenditures.
County revenue from real estate taxes and taxes on public consumption — like sales, meals and lodging taxes — was $13 million behind projections during the first four months of the fiscal year that began July 1, County Manager Mark Schwartz said in a County Board briefing yesterday (Tuesday).
In response to this, as well as higher-than-expected expenses in other areas, “we’re slowing down on capital projects, we’re going to delay — we still plan on doing it — selling our bonds,” he said.
“As of right now, we’re about $8 million below those levels that were assumed when the Board acted [on the fiscal 2026 budget] in April,” he said. “In my 20 years of working in the county, we’ve never been in that situation.”
His figures are based on data from the first four months of the fiscal year, which began July 1.
Estimates for real-estate revenue are down about $5 million from projections, Schwartz added, and county officials also have braced for what could be major federal cuts in funding to states and localities.
On that front, Schwartz said, things remained in flux but are worrisome.
“It’s not certain what is going to happen, but we should expect some additional impacts,” he told Board members.
The county government is facing higher expenses for social-safety-net programs and overtime for public-safety and healthcare workers, Schwartz said.
For fiscal year 2027, efforts will be made to hold off on discretionary expenditures and maintain a hiring slowdown, but not a freeze, he said.
His remarks came as County Board members on Dec. 16 provided staff with guidance in developing the fiscal 2027 budget. The guidance does not rule out increases to taxes, including the real-estate tax rate, but also directs Schwartz to close any budget gaps by primarily focusing on budget cuts.
Schwartz is expected to deliver his budget proposal, likely topping the $1.69 billion fiscal year 2026 spending plan, in February.
Karantonis is sworn in: Several hours after that sobering report, community members gathered to watch Board member Takis Karantonis take the oath of office for a new term.
Karantonis easily won a new four-year term on Nov. 4, besting a Republican and three independents. He was first elected in mid-2020 to fill the seat of the late Erik Gutshall, and won a full term in 2021.
At his swearing in, Karantonis said the county government would do what was necessary to support those impacted by a weakening regional and national economic picture.
“We are responding,” he said. “We really care about continuing to be a place of opportunity … to welcome those who will build the future here,” he said.
Karantonis has served as Board chair during 2025. He will hand over the gavel after Board members select their chair for the coming year in early January.
Auditors for county, schools plan more interaction in coming year: Closer collaboration between the auditors working for the County Board and School Board is on the horizon for 2026.
The two auditors — Wayne Scott for the county government, Alice Blount-Fenney for Arlington Public Schools — held the first of what they aim to be quarterly roundtable discussions in November.
They will continue into the new year, Scott said at the Dec. 11 meeting of the county government’s Audit Committee.
Staff from the Department of Management and Finance (DMF) also will be part of the meetings. Previously, DMF personnel interacted with both the county auditor and the schools’ auditor, but this will mark the first time all are in the room together.
The new initiative won support from Audit Committee member John Vihstadt. “Great, wonderful,” he said at the meeting.
Blount-Fenney was appointed auditor by the School Board in mid-2023. Scott was appointed auditor by the County Board in mid-2024 after several individuals had come and gone in the position. He went to work tackling a backlog of audit projects.
At the Dec. 11 meeting, Scott also announced that 2026 would bring another first: public-comment periods at meetings of the Audit Committee.
Details remain to be worked out, including whether there should be a cap on the number of speakers, how much time individual speakers should have and where the comment period should be placed on the agenda.
Without some limitations in place for public comment at the evening meetings, “we would be serving breakfast, scrambled eggs and bacon,” before they concluded, Scott chuckled.
