Arlington County Manager: Balancing FY 2014 Budget Requires Tough Choices on Service Cuts, Tax Rate Increase

  • Proposes increased funding for schools, new facilities
  • Preserves most services
  • Targets 46 staff positions
  • Recommends 3.2-cent increase in real property tax rate

ARLINGTON, Va. – Citing the need to close a $22 million budget gap in Fiscal Year 2014, Arlington County Manager Barbara Donnellan today previewed for the County Board a proposed balanced $1.073 billion budget that calls for a mix of service cuts and a 3.2 cent real property tax rate increase.

The County is feeling the effect of the Base Realignment and Closure (BRAC) process, which has pushed office vacancy rates in Arlington to their highest level in years, Donnellan said. Flat property assessments, as well as ongoing economic uncertainty posed by the slow pace of the nation’s economic recovery, the threat of sequestration and deep federal spending cuts, pose ongoing challenges, she said.

In addition, Arlington faces growing competition from the District and outer suburbs for commercial tenants, Donnellan said.

To meet these challenges, the County Manager said, she followed County Board guidelines and proposed a combination of reduced services, the elimination of 46 staff positions and an increase in the real property tax rate to close the budget gap.

“It is not an easy thing to recommend an increase in the property tax rate,” Donnellan said. “We have tried to maintain services that Arlingtonians hold dear and to respect the values of our community. To do that, we are forced to ask our community and our staff to contribute to closing this budget gap.”

Budget growth below CPI

Under the County Manager’s proposal, the FY 2014 Budget would grow 2 percent over the Adopted FY 2013 Budget – slightly below the 2.1 percent growth in the Consumer Price Index over the past calendar year.

Strong economic base

The County’s economic fundamentals, including its property tax base, remain strong, Donnellan said. “Tax base growth in the near-term could remain flat, particularly in the commercial sector, but we see positive signs in the residential market,” she said. “We have a strong track record of managing through difficult situations.”

Arlington still enjoys the Commonwealth’s lowest unemployment rate, a strong, fully funded pension fund and solid reserve levels, Donnellan noted. She expressed confidence that her budget will enable Arlington to maintain the triple-AAA bond rating that allows it to borrow money at the lowest available interest rates.

Budget highlights

Donnellan’s proposed budget would increase the tax and fee burden for the average Arlington household by 3.9% from $6,726 to $6,988, or about $22 a month ($262 a year). The proposed 3.2 cent tax rate increase includes 1.1 cents for schools and almost 0.5 cents to pay for new facilities. The remaining 1.6-cent increase will be used to maintain all other County services.

Half of the proposed tax rate increase, Donnellan said, is attributable to the cost of new facilities and to increased enrollment in Arlington Public Schools. The proposed budget includes a transfer to Arlington Public Schools of $411.1 million, up $10.8 million, or 2.7% over FY 2013. Some $7.1 million of that, Donnellan said will fund a projected increase in student enrollment of 962.

The proposed budget includes cuts in staffing for community policing, nursing care, camps and recreation, Donnellan said. In addition, some positions will be held vacant, “which may result in slower service times to residents and employees, and slower implementation of technology across the organization,” she said.

The Manager included a merit step increase for County employees in her proposed budget, citing the County’s need to stay competitive in the region, and the increasing workload on remaining employees as cuts are made in staffing.

Some fees to decrease, others to go up

Donnellan proposed increases in some development services fees, Parks & Recreation fees and Human Service fees. She also proposed reducing some fees for residential and commercial construction. Fees for home improvement projects, she noted, will go down. The Household Solid Waste fee will also be slightly reduced.

Next steps

The County Manager reached out to the community for input into the FY 2014 Budget. Feedback was sought online, the County Manager met with Commission chairs in November and held a public online budget chat in December and another online budget chat with employees.

The Board will hold a series of public work sessions on the budget and two public hearings. The first budget hearing is scheduled for Tuesday, March 26. The second, on tax proposals, will be held Thursday, March 28. The Board will adopt the budget in April, and the new fiscal year will begin in July. To view the Board’s meeting schedule, visit the County website.

For more information on the FY 2014 Budget, visit the County website and search “FY 2014.” The County Manager’s full Proposed Budget will be available on Saturday, Feb. 23, 2013.

Arlington Va., is a world-class residential, business and tourist location that was originally part of the “10 miles square” parcel of land surveyed in 1791 to be the Nation's Capital. Slightly smaller than 26 square miles, it is the geographically smallest self-governing county in the United States, and one of only a handful with the prized Aaa/AAA/AAA bond rating. Arlington maintains a rich variety of stable neighborhoods and quality schools, and has received numerous awards for Smart Growth and transit-oriented development. Home to some of the most influential organizations in the world — including the Pentagon — Arlington stands out as one of America's preeminent places to live, visit and do business.