With the county government’s fiscal year 2027 budget season now over, eyes are beginning to turn to fiscal year 2028 — which may or may not be any easier to balance.
“Very uncertain” is how County Board member Julius “JD” Spain, Sr., describes the future of the local economy and its impact on the county’s budget process that will play out over the next 12 months.
“Everybody wants some level of definitiveness, but it’s hard to say,” he said. “It’s going to take some time to analyze.”
Board members earlier this month voted for a $1.69 billion fiscal year 2027 spending package that increases a host of taxes and fees. Most notable: The real estate tax rate increased two cents to $1.053 per $100 assessed valuation.
The lone vote against the 2-cent increase was Susan Cunningham, who believed her colleagues should have held the jump to 1.5 cents. Cunningham, like Spain, says uncertainty about the future remains.
“I think next year will be tough,” she told ARLnow following the adoption of the budget.
Next up for county leaders this spring will be consideration of an updated capital improvement plan, or CIP. Cunningham said she believed the package should focus first on maintenance of existing facilities.
“There’s a lot of deferred stuff” that needs to be addressed, she said.
Fairfax County and the city of Falls Church are enacting fiscal year 2027 budgets without tax-rate increases. But the two-cent increase for Arlington property owners may not be the last they will experience in the near term.
With assessments of Arlington commercial property still well down from pro-Covid values, more of the county’s tax burden is likely to continue to shift to owners of residential properties due to lethargy in the commercial sector, County Manager Mark Schwartz acknowledged in his draft fiscal 2027 spending plan released in February:
“Local tax revenues are projected to grow at an average annual rate of approximately one to two percent from FY 2028 through FY 2032. The forecast assumes a lower growth rate for real property assessments when compared to the last 10-to-15-year average. In addition, growth is expected to be constrained by a near-term slowdown in new commercial and multi-family construction. Although a significant pipeline of projects exists, elevated construction costs and more challenging financing conditions have limited the start of new construction projects, which will limit additions to the tax base in coming years.”
With the current budget season now concluded, several residents who carefully watch the process from the outside are offering their grades.
Suzanne Smith Sundburg, a veteran fiscal watchdog, was not terribly impressed with the end result.
“Efforts to rein in spending growth by the manager and County Board have been tepid, at best,” said Sundburg, who chairs the Arlington County Civic Federation’s revenues and expenditures committee but was speaking on her own behalf.
“Though a 1.7% spending increase may sound small, in dollar terms it equals roughly $28.9 million in new/increased spending,” Sundburg told ARLnow.
The biggest issues of the fiscal 2027 budget cycle were the proposals by Schwartz to eliminate competitive and recreational gymnastics programming, shut the Barcroft Sports & Fitness Center for a year and permanently close Cherrydale Library. Ultimately, County Board members restored gymnastics, albeit with fee hikes for participants, and kept both the Barcroft and Cherrydale facilities open.
Audrey Clement, who has been running for County Board as an independent protest candidate for more than a decade, has seen this type of scenario play out in the past.
“I resent the county’s cynical budget dynamic, which is to threaten to cut popular programs like gymnastics, libraries and wood shops in order to extract major tax-rate hikes,” she said. “Even more discouraging is the usual public reaction, which is to howl at the cuts and roll over to the hikes.”
“A much better approach is for the public to propose reasonable revenue measures and demand to know why the county isn’t implementing them,” Clement told ARLnow. “To their credit, a few Barcroft parents proposed fee increases to keep the gymnastics program open.”
To help, Clement said she believes Arlington Economic Development could focus on convincing “tax burdened New York City entrepreneurs unhappy with Mamdani’s ‘tax the rich’ proposals to relocate along the Rosslyn-Ballston corridor.”
“This would generate lots of commercial real estate tax revenue and jobs, obviating the need to stick it to residential taxpayers,” she said. “Florida and Texas have been pursuing NYC businesses for years. It’s time for Arlington, which promises immediate access to the nation’s power brokers, to get into the act.”
Similar concerns about the need for aggressive economic-development efforts were raised pre-pandemic.
In its 161-page report delivered in 2015, the county’s Community Facilities Study Committee said that reliance on commercial real estate had served the community well, but was under stress:
“Arlington can no longer rely on its location and reputation to sell itself. It must step up its game in marketing and improve its receptivity to business, both those currently located here and those wanting to come. It must focus on new markets such as research and education and build on the technology businesses in Crystal City and Ballston. It must be willing to respond quickly and with flexibility to requests for minor or temporary changes to buildings or their environs.”
Civic activist Sundburg said that regardless of whether economic-development efforts bear fruit, she would like to see more aggressive steps taken to rein in the county’s budget growth:
“A deer-in-headlights approach that ignores Arlington’s changed circumstances and its fiscal challenges won’t improve our fiscal outlook. Without a more reality-driven approach to budgeting, Arlingtonians will face more — and perhaps even larger — budget shortfalls, and tax/fee increases, in the coming years.”
While planning for future Arlington budgets never stop, efforts do slow down in the late spring and summer months. Fiscal year 2028 efforts will ramp up in the fall, in anticipation of the county manager’s budget presentation next February.
$1.7 million in ‘Opportunity Grants’ awarded: County Board members on April 22 approved $1.69 million in funding for 31 organizations as part of the county government’s fiscal 2027 Opportunity Grants program.
Individual grants ranged from $20,000 to $105,000, and went to the following organizations:
- Economic security: Arlington Thrive; Capital Area Food Bank; Edu-Futuro; ENDependence Center of Northern Virginia; Ethiopian Community Development Council; La Cocina VA (Kitchen of Purpose); Legal Services of Northern Virginia; Shirlington Employment and Education Center; The Arc of Northern Virginia; Clothesline for Arlington Kids; Arlington Salvation Army; True Ground Housing Partners
- Education: 1st Road South; Affordable Homes and Communities; Aspire! Afterschool Learning; Bridges to Independence; Literacy Council of Northern Virginia (English Employment Center); Literacy Tutoring Collaboration; Read Early and Daily (READ)
- Health: Arlington Free Clinic; Arlington Neighborhood Village; Meals on Wheels of Arlington; National Capital Treatment and Recovery; NovaSalud; PathForward
- Legal/justice services: Ayuda; OAR of Arlington, Alexandria and Falls Church; Restoration Immigration Legal Aid
- Social connections/community: Best Buddies International; Our Stomping Ground (City Center Nova)
Nonprofits submitted a total of 69 grant proposals requesting a cumulative $4.93 million in support through the grant program.
“This was an increase of 14 proposals compared to the FY 2026 grant cycle, yet represented a $1.43 million decrease in total funding requested, mainly due to the recommended grant guidance for smaller financial requests,” county staff said.
