Arlington doesn’t have it as bad as other communities, but the pandemic is causing a drop in tax revenue that is likely to result in some budget cuts.
That’s the message from County Manager Mark Schwartz, who presented an update on the county’s finances at last night’s County Board meeting.
The main highlight from Schwartz was the county budget closeout — the allocation of funds leftover from the previous fiscal year’s budget, which closed on June 30. There was $22.4 million left over from the 2019-2020 budget, most of which Schwartz recommended using to boost the current Fiscal Year 2021 budget.
“As proposed, $13.4 million would be used for the FY 2021 budget, $2 million would be put into the County Manager contingency fund, $2 million would support an employee separation contingent, and $5 million would be set aside to address COVID-related expenses in the FY 2022 budget,” said a county press release, below.
The Board is scheduled to vote next month on Schwartz’s recommendations, after receiving public feedback.
While a number of local advocacy groups have traditionally used the budget close-out process to secure additional funding for various initiatives, that is likely to be curtailed this year. Schwartz reiterated his previous warning that the county and Arlington Public Schools are together facing a $56 million budget gap for FY 2021.
“Usually we would already be thinking about our next budget, but instead we must figure out how we will provide the services and programs in the FY 2021 budget and fulfill our primary obligations to Arlington residents,” Schwartz said.
On the table for closing the gap, caused by a revenue shortfall and unexpected pandemic-related costs, is a reduction in county services. Schwartz’s presentation said that the county hopes to save $6.1 million by reducing some services and by not filling some vacant positions.
While holding out hope of saving money with a hiring freeze and preserving currently filled positions, Schwartz recommended that the Board set aside $2 million for “employee separation” costs, potentially including early retirements and buyouts.
From a county staff report:
As we work through development of the FY 2022 budget, we will be considering changes in how we deliver services based on our experience during COVID and due to anticipated revenue declines. This contingent would allow the Manager flexibility in addressing any impacts of these changes. As an example from prior years, we have offered various incentives for early retirement and other buy-out options. It is likely that these options will need to be effective prior to the beginning of FY 2022 (July 2021); thus, funding would be needed in FY 2021.
Other planned sources of savings outlined by Schwartz include debt refinancing ($2.4 million), federal CARES Act funding ($9.3 million) and “operational adjustments” — delayed facility openings ($1.9 million).
More from a county press release, below.
(Updated at 3 p.m.) Arlington County is facing a possible budget gap in the tens of millions dollars during the current fiscal year, as a result of the pandemic.
That’s the message from county staff, who raised the alarm during Tuesday’s County Board meeting.
“We had hoped that the recovery that we had anticipated at the time in March and April would be further along, and that’s simply not the case,” said County Manager Mark Schwartz.
As a result, tax and fee revenue is coming in significantly lower than expected, and Arlington is now facing an estimated budget gap between $42-60 million for the fiscal year that started on July 1. On the high end, that comes out to a gap of about $39 million for the county government and $21 million for Arlington Public Schools.
The County Board adopted a scaled-down, $1.35 billion budget in the spring — $820.8 million for the county, $524.6 million for schools — assuming lower revenue due to COVID-19. But as the pandemic and its effects drag on, the impacts are becoming bigger than first estimated.
“Clearly this is taking longer than we had anticipated, in terms of both the health and economic recovery,” said Budget Director Richard Stephenson.
Restaurant, sales, car rental and hotel taxes are still down — way down, in the case of hotel taxes. Stephenson showed a slide that compared the county’s expectations for those taxes to reality; rather than a V-shaped recovery, with the tax revenue getting back to near-normal this fall, actual revenues have been much lower and county budget staffers now do not expect to return to near-normal until mid-2021.
Parking meter fees, parking tickets, parks and rec program revenue, and transit revenue are all also coming in lower than expected, Stephenson said. Residential real estate taxes and vehicle property taxes are closer to projections, but the county is worried about potential tax delinquencies from residents facing economic hardship.
Another slide showed overall consumer spending in Arlington still down 22% compared to earlier in the year, when the first U.S. coronavirus case was reported.
Commercial property taxes, business license taxes and business property taxes may also take a hit from delinquencies, Stephenson said. The county is not projecting any growth in property assessments next year, something that has boosted the past couple of budgets without raising tax rates.
Stephenson presented a number of options for dealing with the budget shortfall, for the County Board to consider, including slowing some spending, using leftover funds from last year’s budget, using unallocated funds from Arlington’s share of the federal CARES Act, and using the county’s general budget reserves.
The County Board will learn how much is left over from last year’s budget in October, before deciding what to do with those funds in November, when it will receive further budget guidance.
The coronavirus pandemic will mean big changes to the Arlington Public Schools budget.
Interim Arlington Public Schools Superintendent Cintia Johnson presented her revised budget to the School Board via video conference last night, detailing plans to slash $54 million from what was once an ambitious budget calling for $725.8 million in expenditures.
The new budget assumes a drop in projected revenue from $698 million to $660.6 million. To balance the budget, Johnson proposes eliminating all across-the-board pay raises, nixing other planned expenditure increases, increasing class sizes at all grade levels by one, furloughing all staff for one day next spring, and using $14 million in reserve funds.
The school system’s reserves would drop from $26.5 million to $12 million, and would eventually need to be replenished in future budgets.
“We are using a significant amount of reserve funds to balance the budget, but we believe this is the best option for APS in order to preserve our team, maintain our high quality staff, and continue our tradition of excellence,” Johnson said. “”This is an extremely unusual year that has brought increased budget pressures. as a result, we have had to make some very tough decisions.”
Johnson presented two scenarios to the Board for employee pay raises, but said neither was viable for achieving a balanced budget.
The budget also calls for eliminating the Foreign Language in Elementary School program, eliminating tuition reimbursement for staff for the year, cancelling six planned school bus purchases, delaying purchases of furniture and technology for APS administration headquarters, delaying a planned athletic field renovation at Kenmore Middle School, and delaying a number of hires.
“We have preserved, as much as possible, our quality programs and services,” Johnson told the School Board last night.
The budget includes enough staffing to absorb a 4% increase in student enrollment — projected to be 29,142 at the beginning of the school year — and increased funding for English learners and students with special needs, as mandated by a settlement with the U.S. Dept. of Justice.
APS’ cost per pupil, currently the highest among D.C. area suburbs, would drop from $19,921 to $19,624.
Johnson says there are some unknowns that may yet affect the budget, including whether APS might see any boost in funding from federal coronavirus stimulus programs like the CARES Act, or reduced funding from the state. She said the furlough day should be scheduled as late in the next school year as possible, so that it can be eliminated should additional funding become available.
After a two work sessions and public hearings, the School Board is set to adopt the final Fiscal Year 2021 budget on Thursday, May 7.
No raises, few areas of additional spending and a couple of delayed openings.
That’s the summary of County Manager Mark Schwartz’s revised budget proposal, as announced by Arlington County on Monday afternoon.
The new Fiscal Year 2021 proposed budget “focuses on core essential services of government, retaining the existing workforce and proactively responding to the pandemic,” the county said in a press release.
The revision comes as Arlington expects a projected $56 million drop in revenue as a result of the coronavirus pandemic, dealing Schwartz’s formerly “good news budget” a $34 million reduction while tacking on $21.6 million to Arlington Public Schools’ already sizable budget gap.
Local and state governments have been bracing for big reductions in revenue as the pandemic causes sales tax, meals tax, hotel tax and other types of revenue to plummet.
Schwartz’s new budget proposal allocates more than $10 million for relief efforts, including food assistance, help for local businesses and nonprofits, and employee assistance. County services in the new budget are mostly kept as the current budget year’s levels, and proposed county employee pay increases have been nixed, per the county press release.
Other proposed, money-saving efforts including delaying the openings of the newly-built Lubber Run Community Center and Long Bridge Park aquatics center, as previously suggested by County Board Chair Libby Garvey.
The County Board will now hold a joint budget and tax rate hearing at 7 p.m. on Thursday, April 23. Final budget adoption is scheduled for Thursday, April 30.
After advertising no tax rate increase, the County Board can only keep the current rate steady or lower it. The average homeowner is still likely to pay more in property taxes, however, given a rise in property assessments.
The full county press release is below.
As the County faces the impacts of the COVID-19 pandemic, County Manager Mark Schwartz presented the Arlington County Board with a revised FY 2021 Proposed Budget that focuses on core essential services of government, retaining the existing workforce and proactively responding to the pandemic.
County staff estimates a nearly $56 million drop in anticipated revenue for the FY 2021 budget–$34.0 million on the County side and $21.6 million for Arlington Public Schools.
“What was unthinkable two months ago is now in front of us,” Schwartz said. “Businesses have laid off staff, residents have lost jobs, schools have closed and only the most essential functions continue.”
In February, Schwartz presented a budget that added back targeted investments in areas that were falling behind after two years of reductions. Now, his revised budget maintains only the current levels of service, removes all salary increases, places many projects on hold, uses funds from the Stabilization Reserve, and removes almost every addition proposed only a few weeks ago.
The budget delays the opening of the Lubber Run Community Center and the Long Bridge Park Fitness & Aquatics Center until FY 2022.
The County Manager’s revised budget also responds to the pandemic. It provides funding to meet projected demand in direct life/safety services to our residents, such as housing grants, permanent supportive housing, and identifies $2.7 million for emergency needs, such as food assistance. An additional $7.5 million is set aside for potential assistance to small businesses and nonprofits, service delivery recovery and employee support, and possible additional shortfalls in revenue.
The County Board now will take up the Manager’s proposal and is expected to vote on the amended budget on Thursday, April 30. There will be a public hearing on the new FY 2021 budget proposal, followed immediately by a tax hearing, on Thursday, April 23, at 7:00 p.m.
Before the pandemic, the County Board voted to advertise a tax rate of $1.013 per $100 of assessed value for Calendar Year 2020 ($1.026 including stormwater). By law, the Board can adopt a tax rate no higher than the advertised rate.
Local Coronavirus Test Results Delayed — “When we talked to an Arlington man Tuesday, it was approaching 11 days since he’d been tested for COVID-19, and he still hadn’t received his results. ‘It’s just so frustrating,’ Daniel Miller told us via FaceTime. ‘I just want my results back. I want to be able to know what I have. I want to know if this is COVID or not.'” [WJLA]
APS to Rethink Budget Proposal — “Arlington School Board members have given Superintendent Cintia Johnson direction to start battening the hatches as the school system – like the county, state and nation – move into rough economic waters. ‘We’re going to have to look at potential tough budget times’ and ‘figure out a way to move forward,’ School Board Vice Chairman Monique O’Grady said.” [InsideNova]
Local Restaurant Owner Still Optimistic — The outbreak has been devastating for the restaurant business, but some local owners are making the most of it. Amir Mostafavi, founder of the South Block juice chain, is giving away free fruit to kids in need during the crisis. “We’re going to come out of this as stronger people, as stronger businesses,” Mostafavi told NBC 4. [LinkedIn]
Bayou Bakery Closing Its Takeout Service — “Having persevered for three weeks through the limitations of the current public health situation, Arlington’s Bayou Bakery, Coffee Bar & Eatery is temporarily closing its doors to ‘Call-In, Carry Out’ service on April 1, 2020. Chef/owner David Guas will continue his mission to provide the community and underserved kids and families with free, grab-and-go meals.” [Press Release]
Shuttle Bus Company Helps Collect Food — “FLARE, an amenity electric shuttle service, along with the Aurora Highlands Civic Association, collected and delivered over 800 lbs. of food donations from the Crystal City area for the Arlington Food Assistance Center on Saturday, March 21, and announced that food collection efforts will continue in the Crystal City area starting today.” [Press Release]
Photo courtesy Allison Bredbenner
As of noon Monday, the number of known coronavirus cases in Arlington again increased — to 34 cases from 26 cases on Sunday and 17 on Friday, according to the Virginia Dept. of Health. Some of those are suspected cases of community transmission, which cannot be traced back to travel abroad or contact with a person known to be infected.
At the Arlington County Board meeting on Saturday, Arlington County Health Director Dr. Reuben Varghese provided an update on the county’s response to the COVID-19 outbreak.
“We have cases in Arlington, as well as in the region… there is now evidence for local transmission, community transmission,” said Varghese. “[These are] cases where you can’t find a known source related to travel… The cases in Georgetown were a known cause, but we now have evidence without being able to find a known source of transmission.”
Varghese said that this was completely expected and the work being done now on social distancing will help reduce the spread.
“With that evidence of community spread in Northern Virginia we want to remind everyone: infectious diseases don’t respect boundaries and all localities should be vigilant in helping to slow the spread of the virus,” Varghese said.
Varghese advised people to wash their hands frequently and to cover their faces when coughing, complimenting someone else in the room mid-speech with having “good technique” as they started to cough.
Statewide in Virginia, there are now 254 known coronavirus cases, including 38 hospitalizations and 6 deaths. Nearly 3,700 people have been tested, according to the state health department. Fairfax County now has the highest number of cases among individual jurisdictions in the Commonwealth: 43.
Meanwhile, the county is scrapping its previous budget.
“We’re doing the best to get a new budget proposal by April 1,” County Manager Mark Schwartz said. “It will be a very small document with increased demands in certain areas and less revenue.”
Schwartz said that, as the county did after the 9/11 terror attacks, all capital projects will be reprioritized to divert resources to essential needs. Budget work sessions have been temporarily suspended.
“We expect occupancy tax and meals tax to be low,” Schwartz said.
Schwartz said that occupancy rates at Arlington hotels are currently around 2-3% with one closing that week.
Image via Arlington County
Arlington County may have opted to keep the tax rate steady, or even cut it, but the Arlington Public Schools (APS) says it still needs to find a way to bridge at least a portion of a $27.6 million budget gap.
In total, Interim Superintendent Cintia Johnson’s budget comes out to $725.9 million in expenditures and only $698.4 million in revenue, assuming the transfer from the county to the school system remains as proposed by County Manager Mark Schwartz.
Budget gaps are nothing new for APS, but the difference has often been covered by tax hikes that the off the table for this year. The familiar pattern prompted some cynicism at a budget work session last night from School Board member Nancy Van Doren, who said she’d been through the budget dance six times and hoped that maybe this year would be different.
“Maybe I’ve just done this too many times but I know the process we’re about to go through,” Van Doren said. “We have a greater need than the money allocated to us by the county. They have proposed their tax rate and it’s not going to be enough for us to cover our budget. Therefore we’re going to them and asking them for more money. They’re going to decide how much they give us and we’re going to adjust our budget.”
“That will involve a lot of community angst,” she added.
Van Doren proposed, at some point in the budget process, meeting with the County Board formally before the School Board prepares its final budget.
“There’s a script to this that we all go through, and it’s exhausting,” Van Doren said. “I’m wondering if we might write a letter to the county and say ‘we have a 27 million shortfall, how much are you going to help us with’ so we can cut to the chase and find out what we have to close.”
She faces a similar veteran of budget gaps, County Manager Mark Schwartz, who in his budget presentation to the County Board said he fully expected APS to request more funding, but that the $17.7 million more than last year that the school is receiving should be enough to account for the increase in students.
Johnson’s budget presentation cited a 4% increase in enrollment and rising costs for students with special needs, transportation services, substitutes, ADA accommodations and health insurance as factors in the gap. Enrollment growth accounted for $12.8 million, but that was not the largest new cost in the budget.
The largest cost increase in Johnson’s budget is a step increase for school employees and a 1.6% cost of living adjustment, totaling to $18 million. There are also $10.3 million in one-time and ongoing costs for opening five new schools and programs, according to a press release from APS.
The budget also proposes 84 new special education and special needs positions throughout the school system — at an annual cost of $6.56 million — and around 35 new full-time English Learner teachers, at an annual cost of $3.89 million, to comply with a settlement with the U.S. Dept. of Justice.
Arlington County has a new budget and a higher real estate tax rate.
The County Board unanimously approved a $1.4 billion budget for Fiscal Year 2020, avoiding the most controversial of its proposed cuts while hiking the taxes paid by the average homeowner to $9,023, an increase of $281.
Arlington property owners will now pay an additional two cents for every $100 in assessed property value, on top of increasing property values. Most of the additional revenue will go to Arlington Public Schools, which is set to receive $532.3 million in local tax dollars, which will help it also avoid some proposed, controversial cuts.
County Board members characterized the budget as fiscal prudence, despite the tax hike. They noted that it includes $4.8 million in county budget reductions, trimming 27.5 full-time staff positions deemed to be no longer necessary due to declines in demand for certain services.
The cuts range from a 5 percent reduction in funding for community radio and public access TV operator Arlington Independent Media to cutting Arlington Transit bus service on a route that records as few as 3 riders per hour.
“I would think about this not as government getting smaller, but as government getting smarter,” said County Board Chair Christian Dorsey.
Board member Erik Gutshall said county leaders went over the budget with a “fine tooth comb” and the result is a budget without “an ounce of fat.”
“We certainly would prefer not to raise rates at all but this is a budget we can be proud of as thoughtful, progressive, and sound,” said Board member Matt de Ferranti.
While the Board restored a pair of arts positions — cuts that would have affected theater programs in the county — it asked the County Manager to study those positions and the county’s arts programs in general prior to the next annual budget. Vice Chair Libby Garvey said that libraries should also be studied.
“[I’m] hoping in this next year… we take kind of a holistic view of libraries, and what we want libraries to be in our community, what role we want them to play,” she said.
There was hopeful talk on the dais about the effects of Amazon’s new Arlington presence.
“Happily the commercial vacancy rate is getting a little better,” Garvey said, adding that “obviously Amazon helps that a lot.”
In Arlington, roughly half of county revenue comes from commercial real estate and businesses.
The FY 2020 budget helps to shape a community “that a company like Amazon wants to come to,” said Gutshall. “And when they come they help our commercial [real estate] assessments that did the most of the work in bridging the gap this year.”
The full Arlington County press release on the budget’s passage, after the jump.
The Arlington School Board has advanced a $669,314,705 million proposed budget — a budget that features a gap of over $6 million.
The Board voted 4-0 to approve its proposal for the school system’s next fiscal year budget. One member, Barbara Kanninen, abstained. Final budget approval is set for May.
Voting stretched late into Thursday night as members weighed five amendments detailing how funds could be cut to reduce the $6.7 million budget shortfall.
Members approved four amendments that together shaved $1,163,330 off the budget by proposing to:
- Eliminate an anonymous reporting hotline
- Eliminate APS HR’s budget for computer replacements
- Eliminate two Technology Support Positions, one Foreign Language in elementary schools position, one full time HR position, and two assistant director positions in assessment and transportation
- Reduce funding for postage, evaluations, and clerical substitutes
- Reduce printed report cards
- Reduce Foreign Languages at Key School
- Reduce travel reimbursements, and increase student parking fees
Another approved reduction was for the fund that provides employee service awards and special events — hours after the School Board celebrated 168 teachers in front of the dais for their decades of work in APS.
A pair of local arts groups are planning a rally outside county government headquarters Tuesday to protest proposed budget cuts to some Arlington arts programs.
The rally, dubbed “A Celebration of the Arts in Arlington,” is set to take place at 6 p.m. on Tuesday, April 2, outside of the Ellen M. Bozman Government Center (2100 Clarendon Blvd) in Courthouse.
- Closure of the Scene Shop
- Closure of the Costume Lab
- Elimination of the Facilities Manager
- Elimination, in one year, of the Facilities Technology Services Director
- Elimination of the Audio Production Specialist
- Elimination of Supervisor of the After-Hours Building Engineers position
- Elimination of the Mobile Stage
- A $70,000 (1/3 of the total grant budget) cut to arts grant budget
A petition against the cuts, which would mostly affect theatrical productions, has gathered more than 2,750 signatures.
The rally is planned to coincide with the County Board’s public budget hearing at 7 p.m.
“Many of Arlington’s performing arts groups will be showcasing their talents and expressing their opposition to the proposed arts budget cuts,” says a press release about the rally before the hearing. “The community is invited to join the festivities and share stories about the positive impact of the arts in Arlington.”
School Board Budget Quarrel — “Despite being blasted by colleagues for circumventing established procedures and potentially poisoning a well of goodwill, a majority of School Board members on March 28 voted to direct their chairman to tell County Board members the school system couldn’t take any further budget cuts.” [InsideNova]
Arlington Tech Succeeding in Engaging Girls — The Arlington Tech high school program “applicant pool for the 2019-20 school year has an almost equal breakdown when it comes to gender. As far as reflecting the county’s racial diversity, this public school program, which accepts students based on a blind lottery, is within a few percentage points.” [Technically DC]
Online Signup to Speak at Budget Meetings — Arlington County’s public meetings on the county budget and tax rate will be held on Tuesday and Thursday, respectively. Those who want to speak at the meetings can register to do so until 5 p.m. the day before the meeting. [Arlington County, Arlington County]
New Name for Nauck Elementary School — Drew Model School in Nauck is being renamed “Dr. Charles R. Drew Elementary School” after the Arlington School board voted last week to accept a naming committee’s recommendation. [Arlington Public Schools]
Photo courtesy of Craig Fingar