Arlington’s commonwealth’s attorney is pushing for an increase in funding for her office as the county continues to wrestle with a relatively tight budget.
At a budget work session last week, Commonwealth’s Attorney Parisa Dehghani-Tafti argued on behalf of three additional staff positions not included in the current budget draft.
Amid federal budget-slashing efforts, Falls Church officials are keeping a watchful eye on about $50 million in approved grant funds.
So far, “we have not heard any word of adverse actions on those grant projects,” City Manager Wyatt Shields told City Council members Monday night.
County Board members on Tuesday night voted 4-1 to advertise a 1-cent increase to Arlington’s real-estate tax rate.
That compares to no increase proposed by County Manager Mark Schwartz, and would, if fully adopted, raise a typical homeowner’s tax bill 4.7% year-over-year.
It may come down to more school funding or homeowner tax relief as Falls Church city leaders start mulling over budget options for the coming year.
Although the formal presentation of draft city and school-system budgets is more than a month off, city officials now have a better idea of the fiscal condition of the 2.2-square-mile locality.
Residential property assessments are up 3.7% year over year, while commercial property values are largely flat.
That’s according to an announcement from Arlington County.
Arlington County is facing a $30-40 million budget gap in the fiscal year starting July 1.
Arlington’s” budget season” is now underway and county leaders are focused on how to allocate funds and balance the budget. But with more than half of county spending considered non-discretionary, options for cuts are somewhat limited.
On the other hand, another way to close the budget gap — higher property tax rates — looks to be politically challenging given that a continuous rise in home assessments paired with a tax rate increase last year has Arlington homeowners more sensitive to higher taxes.
Given our recent reporting on some of the potential options and tradeoffs, which option for balancing the budget are you leaning towards?
If you vote for cuts, let us know where in the budget should they be made.
As Arlington County eyes another possible tax increase this fiscal year, County Manager Mark Schwartz warns that trimming the county $1.65 billion budget would be no small task.
From the rising costs of compensation to funding commitments that can’t be altered in the short term, Schwartz suggested that cutting costs to fill an anticipated budget gap of $30 to $40 million — about 2% of Arlington’s $1.65 billion budget — isn’t as easy as some might think.
County school leaders, both elected and staff, will be presenting a united front as the fiscal 2026 budget season fast approaches.
In a change from typical practice, the Arlington School Board and superintendent will present a joint budget in mid-March, Board members decided Dec. 12.
By OLIVIA DIAZ Associated Press/Report for America
RICHMOND (AP) — Virginia Gov. Glenn Youngkin proposed a state budget plan on Wednesday to provide tax relief on tips and cars, measures his Republican administration touted as giving money back to middle- and lower-income workers.
County Manager Mark Schwartz has been directed to consider both program cuts and tax increases as he works to fill a fiscal 2026 budget gap currently estimated at $30 million to $40 million.
County Board members on Tuesday night (Dec. 17) voted unanimously to approve budget guidance providing Schwartz the ability to propose tax increases he deems necessary. That could include another increase to the real-estate tax rate.
Gov. Glenn Youngkin (R) says Virginia workers shouldn’t pay state tax on tips they get from customers.
Adopting the policy — supported on a federal level by both president-elect Donald Trump and vice president Kamala Harris during the recent election — would let tipped workers keep an extra $70 million each year throughout the Commonwealth, the governor’s office said in a press release Monday.
Youngkin says he is proposing the tax change in his upcoming budget. GOP state senators, meanwhile, signaled their support for Youngkin’s proposal in statements Monday, after introducing a bill last week to eliminate state income tax on gratuities.
The governor’s press release is below.
Governor Glenn Youngkin today announced a budget proposal to exempt service tips from Virginia’s state income tax. This proposal will return an estimated $70 million annually to the pockets of hardworking Virginians to further deliver on Governor Youngkin’s commitment to lower the cost of living for working families across the Commonwealth. This builds on the more than $5 billion in tax relief already delivered for Virginians under his administration.
“We have delivered over $5 billion in tax relief to date, and we remain committed to lowering the cost of living for hardworking Virginians. It’s their money, not the government’s,” said Governor Glenn Youngkin. “By removing tips from taxable income, it will directly increase the take-home pay of hundreds of thousands of Virginians and give them more buying power, which in turn will improve financial stability, stimulate local economies, and honor the value of their hard work.”
The Virginia Department of Taxation and the Virginia Employment Commission estimate that more than 250,000 Virginians within the food service industry, personal service industry (such as hair stylists), and hospitality industry (such as bellhops and concierges) could benefit from the proposed tax relief. Workers who receive tips from their employment in other industries would also benefit.
Virginians who earn tips will be able to claim a deduction on their state tax return, provided the income is included in their federal adjusted gross income. The Department of Taxation will use IRS data and employer-reported W-2 information to ensure compliance.
The Commonwealth’s robust financial health, marked by record employment levels, rising revenues and surpluses, robust reserves, and a AAA bond rating, enables the Commonwealth to implement meaningful tax relief for Virginians while maintaining fiscal responsibility and sustaining vital investments in public services.
Critics of exempting tips from tax have a number of reasons why they think it’s a bad policy, however, from issues of fairness to a loss of revenue to the risk of distorting labor markets.
“It’s not fair to subsidize Le Cirque waiters but not McDonald’s customer service associates with tax-free tips. Or to so favor a hotel’s housekeeper, but not a homeowner’s house cleaner,” the Tax Policy Center wrote in September. “Or, for that matter, traditional employees and not independent contractors in the growing gig economy.”
What do you think? Should Virginia exempt service tips from state income tax? Or do you oppose the governor’s proposal?
Falls Church homeowners likely will face higher real-estate tax bills in 2025-26 even if city leaders are able to shave a few pennies off the tax rate.
With no rate change, the typical city homeowner would face an estimated median $529 tax increase owing to higher assessments, the result of a still-robust housing market.
