Although Arlington will benefit from rising property values this year in the form of higher tax collections, the Board still must make tough choices when it comes to deciding what to fund and how to fund it.
County Manager Barbara Donnellan has recommended keeping real estate taxes steady at 95.8 cents per $100 in assessed value, following a year in which the rate jumped 8.3 cents. The Board gave itself the flexibility of raising that rate slightly by advertising a 96.8 cent rate.
Arlington has had to make service cuts in each of the past two budgets as taxes and other revenue sources dried up. After 2009, assessed property values suffered their first year-over-year decline since 1995, prompting the county to hike property taxes to make up for what otherwise would have been a dramatic loss of revenue.
When it comes to real estate taxes, the county can always increase the tax rate for an expected revenue shortfall. But one area that’s largely out of the county’s control is the funds it receives from the state. And in the past four years, overall state funding to Arlington County — excluding schools — has dropped $18 million.
In neighborhoods like Colonial Village, tax enforcement officers seek out vehicles with out-of-state tags and/or without Arlington registration stickers. They take notes, snap photos and then send letters to the owners, if need be.
The Personal Property Enforcement Program has collected more than $6 million in lost revenue in seven years, according to Ingrid Morroy, the county’s Commissioner of Revenue.
A number of restaurants have fallen farther behind on their payment of Arlington County meals taxes. Such tax delinquencies are sometimes a sign of shaky financial health, as was the case for failed restaurants like Bebo Trattoria, Restaurant Vero and McGinty’s Public House, all of which still owe tens of thousands of dollars to the county.
The latest delinquency list shows that Front Page Restaurant in Ballston (4201 Wilson Blvd) ran up an additional $23,000 tab with the county between December and February. The restaurant now owes Arlington $46,531.82. As of August, it only owed $17,113.52.
A bill that would have renewed Arlington’s 0.25 percent hotel tax surcharge failed in the Virginia House of Delegates yesterday. The bill, which was approved by the state Senate, did not get the necessary two-thirds vote to pass.
An earlier House version of the bill failed to get out of committee after it was blocked by Del. Tim Hugo. The Fairfax County Republican cited Arlington’s lawsuit against high occupancy toll lanes on I-395 as his reason for blocking the bill.
The board will now be able to set the FY 2012 property tax rate at or below 96.8 cents per $100 in assessed value. The current rate — the rate that Donnellan recommended in her proposed budget — is 95.8 cents per $100.
Last year, when the board set the property tax rate at 1.6 cents above Donnellan’s recommended figure, the advertised rate was 96.5 cents.
A House of Delegates Finance subcommittee approved Arlington’s hotel tax surcharge bill today. It’s expected to be taken up by the full committee on Monday.
The bill that was under consideration today was approved by the Democrat-controlled state Senate in January, under the leadership of Arlington’s Sen. Mary Margaret Whipple. A House version of the bill, introduced by Del. Bob Brink, failed to make it out of committee after being blocked by a key Republican.
Under the proposed budget, the real estate tax would remain steady at 95.8 cents per $100. The 95.8 cent rate was approved by the board last year after Donnellan, then the acting county manager, proposed a rate of 94.2 cents.
Arlington is benefiting from a 6.3 percent hike in assessed property values, which is expected to bring in an additional $30 million in tax revenue for the county. In September, when the county was expecting a smaller increase in assessments, then-County Manager Michael Brown warned that tax hikes and spending cuts might be necessary. Neither prediction is coming to fruition under the Donnellan’s proposed budget.
As expected, the renewal of a hotel tax surcharge that is responsible for generating Arlington’s nearly $1 million per year tourism promotion budget was all-but-killed in a House subcommittee this morning. The bill, introduced by Arlington’s Del. Bob Brink (D), was passed by indefinitely — meaning the House version dead unless a member who voted against it changes his or her mind.
An identical bill introduced by Sen. Mary Margaret Whipple passed the Senate last week, however, meaning that the tax renewal will get another shot in House committee. It’s yet to be seen whether the outcome will be any different.
The lawsuit, which has thus far cost the county about $1.5 million in legal fees, was filed in order to block VDOT’s plan to build High Occupancy Toll lanes on I-395. The suit has been ruffling feathers in Richmond ever since, but on Wednesday it came back to bite the county on a key legislative priority.
Del. Tim Hugo (R) of Fairfax County used his chairmanship of a House finance subcommittee to delay action on HB 1513, Del. Bob Brink’s bill that would extend Arlington’s 0.25 percent hotel tax surcharge for another three years.
The increase is expected to bring in an addition $30 million in tax revenue for the county, which should help to offset this year’s estimated $25 million budget gap. The county budget office was originally expecting an approximately 1 percent increase in property values.
“It certainly… makes it easier for us to balance the budget,” said Michelle Cowan, Director of the Dept. of Management and Finance, who added that stepped-up commercial lending and property sales helped to drive the increase. “We consider ourselves very fortunate.”
Ingrid Morroy may be best known for being Arlington’s chief tax assessor, but on the campaign trail she’s known as the chief singer-songwriter for county Democrats.
Morroy, the county’s Commissioner of Revenue, often performs songs about political causes and candidates at Arlington County Democratic Committee events.
