The majority of Arlington homeowners will face higher property taxes, after the County Board approved a budget that holds the property tax rate steady.
The Fiscal Year 2022 budget includes $1.4 billion in spending, a 3.5% increase from last year’s budget. Of that, $530 million will go to Arlington Public Schools, which will pass its final budget next month.
Arlington County's projected revenue appears sunnier than when County Manager Mark Schwartz first presented his proposed budget for the 2022 fiscal year in February.
The county can attribute this warmer outlook to two sources: the nearly $2 trillion American Rescue Plan and strong business license tax receipts, Budget Director Richard Stephenson said during a public hearing on the tax rate last Thursday. While he did not specify the revenue from the business taxes, Stephenson said President Joe Biden's relief bill will apportion $46 million to the county.
Combined, the influx of cash could mean funding will be restored to libraries, community centers, Arlington Independent Media and the Virginia Cooperative Extension, for example.
Schwartz's proposed budget delays the re-opening of Cherrydale and Glencarlyn libraries and reduces support for AIM and VCE. Between 2019-20 and the proposed budget, funding for AIM had dropped by 22%, while the proposed reductions to VCE would require the organization to find new funding sources or reduce its programs. Members of the public spoke in favor of restoring funding to these programs last Tuesday.
Still, Arlington County will be leaning on real estate taxes for the lion's share, 59%, of its revenue. Specifically, it will be relying on increasing residential real-estate taxes due to rising property values as commercial property assessments drop.
"We've experienced some significant reductions to several of our tax revenues and non-tax fees," Stephenson said. "We were fortunate this past January that real estate assessments came in slightly higher than we were originally projecting. While we experienced a decrease in commercial property assessments, new construction and residential properties increased."
While property values are rising, Schwartz is proposing to keep the rate flat -- at $1.013 per $100 of assessed value -- for the upcoming fiscal year. That will mean an overall tax increase for most homeowners.
The County Board is slated to vote on this rate next Tuesday.
Members cannot increase the rate but they could decrease it, which is something that a few Arlington residents told board members they would like to see.
While Arlington has proposed holding its tax rate steady, nearby jurisdictions -- including Fairfax County and Loudoun County -- have proposed lowering or approved a lower real estate tax rate, said Audrey Clement, who is running as an independent for a seat on the County Board.
"The impetus for tax reductions elsewhere is to provide relief to homeowners hit by rising assessments, even as the pandemic has put a lot of them out of work," Clement told the board.
She said the county is using falling commercial real estate tax revenue to justify freezing rather than lowering the residential tax rate.
"The county will tell you it can't afford to reduce the real estate tax rate because the pandemic has drained the commercial real estate tax revenue, but where were your real estate tax rates heading when the county was flush with revenue from corporate tenants?" she said. "They were going up."
Meanwhile, two residents, William Barratt and Cindy Nelson, both asked the County Board to reduce real estate taxes.
Barratt said the Bluemont Civic Association, of which he is a part, passed a resolution encouraging the board to reduce the tax rate. The homeowner said he and his wife have seen a 15% increase in their taxes in recent years.
"I don't think this is a wise idea for anyone: poor and rich," Nelson said. "It's just not right."
The stormwater tax rate is set to increase, which Stephenson said will help generate $15.1 million earmarked for stormwater improvements.
Eventually, the county plans to eliminate the stormwater tax completely in favor of a fee based on how much impervious surface covers a given property, Schwartz previously said.
A higher cigarette tax rate is also being proposed that could generate $600,000. Like most of the county's tax revenue, almost half of that will go toward Arlington Public Schools, Stephenson said.
Images (2-4) via Arlington County
Real Estate Expected to Get Pricier — “Home prices and, for the most part, sales, have continued to rise in the Northern Virginia market in the last year, even despite the pandemic, but the unanswered question is: what will happen in the future? A consensus forecast report from the Center for Regional Analysis and George Mason University and the Northern Virginia Association of Realtors aims to answer that question and, in short, the upward trends will continue.” [WTOP]
Clement Focuses on Taxes — “Frequent Arlington political contender Audrey Clement’s hat is in the ring for 2021, and she’s focusing, at least initially, on ever-spiraling higher tax burdens on county homeowners. ‘I’m running again because Arlington taxes are slated to go up again even as other Northern Virginia jurisdictions’ tax rates are going down,’ Clement said in an e-mail to supporters, formalizing her bid for Arlington County Board.” [Sun Gazette]
With budget planning in full swing and tax season looming near, you may be wondering what Arlington County is paying for with your tax dollars.
County officials are currently hammering out the details for the next fiscal year’s budget, which the County Board is slated to adopt on Saturday, April 17 and which will go into effect on July 1. The proposed $1.36 billion budget, which County Manager Mark Schwartz calls a “transition” budget, includes a COVID-19 contingency fund and $16.4 million in cuts.
County Still Seeking New Logo Ideas — “Calling all artists, and artists-at-heart! The County will choose a new logo this year that better represents our Arlington community, and we need your help… Submit your logo concept/art by March 14.” [Arlington County]
Fire Breaks Out in Route 1 Median — From Dave Statter: “Watch your cigarettes, matches & ashes. Dry & breezy. A small brush fire on Rt 1 south of 23rd St briefly blocked traffic. @Reagan_Airport MWAA Engine 301 handled it.” [Twitter]
Board Advertises Property Tax Rates — “The Arlington County Board today voted unanimously to advertise no increase in the Calendar Year 2021 base real estate property tax rate, citing the toll the ongoing coronavirus pandemic is taking on residents. The Board also voted to advertise a proposed Stormwater tax rate of 1.7 cents per $100 of assessed real property value to fund the full cost of operations and planned capital improvements to the County’s stormwater infrastructure and flood mitigation… The estimated annual impact for the average household with an assessed home value of $724,400 is $123.” [Arlington County]
Snow Falling in Arlington — Updated at 9:10 a.m. — Snow is falling in Arlington, which is just outside of a newly-expanded expanded Winter Weather Advisory. Be careful out there! [Twitter]
Last year started out as “a good budget year” for County Manager Mark Schwartz. But nearly a year after the pandemic hit Arlington, Schwartz’s new budget proposal is more austere.
Schwartz calls the upcoming Fiscal Year 2022 budget, which is being presented to the County Board Thursday afternoon, a “transition budget.” While modestly increasing spending, his proposal reflects big pandemic-era declines in some key revenue sources.
No APS Return Dates Yet — “Alexandria City Public Schools this week joined a flood of Northern Virginia school systems in setting firm timelines for reopening classrooms, vowing to welcome all students back for in-person learning by mid-March. But in Arlington, school officials aren’t committing to return dates just yet.” [Washington Post]
Summer School Appears Likely — “Gov. Ralph Northam on Friday will announce a plan to extend the school year into summer to allow students to catch up. The announcement will come during an 11 a.m. news conference, Northam said during a Thursday morning interview with Washington Post Live. No details have yet been released. ‘We’re working with our teachers, our school boards, our superintendents. It has to be a top priority,’ he said.” [InsideNova]
The value of homes in Arlington County has soared during the pandemic.
Residential property values in Arlington are up 5.6%, while commercial property values slumped 1.4% from last year, according to newly-released stats. Arlington County is starting the process of mailing the new assessments out to homeowners and commercial property owners.
Earlier this year, in the depths of the economic shock caused by the start of the pandemic, the federal government handed out a half-trillion dollars worth of expedited business loans.
The Paycheck Protection Program helped businesses — mostly small businesses — keep workers employed, with loans issued by banks but funded by the feds in the amount of 2.5 times a business’ average monthly payroll costs.
In March, Arlington County was on-track to set a new record low for tax delinquency rates.
Then, the coronavirus hit.
(Updated at 4:45 p.m.) Facing a potential $41-56 million budget gap, the Arlington County Board is signalling that service cuts and tax rate hikes may be included in next year’s budget.
At its Tuesday meeting, the Board provided guidance to County Manager Mark Schwartz on the upcoming Fiscal Year 2022 budget, covering July 2021 through June 2022. Underlying it all is a big drop in tax and fee revenue caused by the pandemic.
