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Carlee’s Budget Tops $700 Million

Drive for stable finances drove planning for proposed county budget, says county manager.

In a brief presentation Saturday morning, County Manager Ron Carlee unveiled his proposal for a $713 million county budget for the county.

“This begins a long process, and it’s only the county manager’s recommendation,” Carlee told County Board members at their Feb. 7 meeting. “It begins the public process of input on the budget.”

Carlee’s proposed budget grows by 7 percent over this year’s nearly $666 million budget, an increase driven largely by a steady tax rate and an 11.8 percent increase in revenues due to real estate assessments.

The budget is based on continuing fiscal health for tthe county, Carlee said. To that end, there are no new initiatives proposed in the budget and the number of county employees would actually drop.

“There’s not a lot of latitude there to cut, or to shift things around,” County Board Chair Barbara Favola said. Still, she said, there are reasons to look for ways to cut down on county spending.

“My biggest concern is, I’ve got assessments that have grown in the double digits again, and I don’t have much discretionary funding at all,” Favola said.

But some Arlingtonians still expressed concern about the size of the increase in Carlee’s proposed budget. With the rate of inflation at about 2.1 percent, said Wayne Kubicki, a member of the County Board’s Fiscal Affairs Advisory Commission, a 7.1 percent increase “doesn’t make sense in a community that isn’t growing.”

<b>IN A FRIDAY</b> press briefing on the budget, the county manager noted that he was not recommending a tax cut. But that’s not his role in the process, Carlee said. “My responsibility is to put together a budget reflecting the best professional analysis.”

Deciding if there are some programs that may need to see budgets cut in order to cut tax rates is where the board comes in, he said. “Those are policy decisions.”

Carlee’s proposed budget of $712.7 million does include some breathing room — under the current tax rates, the county will collect $715.8 million in tax revenues.

That $3.1 million difference is a contingency fund in the proposed budget, Carlee said, allowing board members to fund three initiatives based on ongoing programs, and to consider cutting taxes. The initiatives are dedicated to ongoing county priorities, and mostly fund programs already in place.

One allocation would increase the number of housing grants available, a program already in place in the county that is intended to make housing in Arlington more affordable to low- and middle-income families. Carlee’s budget includes $510,273 for that program.

Another initiative, funding changes in the county’s public health and safety programs, would budget $403,221. That would allow the county to hire more county health inspectors and sheriff’s deputies.

A third initiative would fund staff for the county’s planning department to coordinate public art programs, and to supervise development in the county, to ensure that builders construct buildings according to plans.

Overall, those programs account for almost $1.2 million, leaving another $1.9 million available to fund a county tax cut - only enough money for a half-cent cut in the rate, which would still mean the average property tax bill would go up by $500.

<b>THE BEST HOPE</b> for a tax cut lies getting more revenue opportunities from Richmond, said Favola. One proposal in the tax reform package presented by Gov. Mark Warner (D) would raise the state tax on sales of cigarettes from 2.5 cents to 25 cents a pack.

That proposal would also give Virginia counties the authority to levy their own tax of 50 cents a pack. Currently, Virginia cities can levy a 50-cents-a-pack tax, but counties in the Commonwealth are limited to a tax of 5 cents a pack.

That tax has netted Arlington about $650,000 over the last two years, with Carlee’s proposed budget projecting the same amount.

If cigarette sales in Arlington remained the same, a 50-cent tax would bring in about $6.5 million next year. “It would be wonderful if the state passed its own tax increase, and then allowed counties to tax up to an additional 50 cents,” said Favola. That increase, along with the $3.1 million contingency, would give board members the option of cutting the county tax rate 2.7 cents, to $0.951 for every 100 of a house’s assessed value.

<b>KUBICKI QUESTIONED</b> the numbers - $650,000 in revenue means that the county sells 13 million packs of cigarettes a year, or more than 35,000 packs a day.

Some of those packs are sold in bulk at Costco, but a higher cigarette tax could also cut into the number of packs sold in Arlington, and in Virginia in general.

Losing sales is unlikely, said Favola. “We just don’t see that kind of behavior,” she said, pointing to steady sales in Alexandria when that city increased its cigarette tax to 50 cents a pack.

If Arlington could raise its cigarette tax, there would be few cheaper options nearby, she said, so a higher tax would not mean a drastic loss of cigarette sales.

But the option of raising cigarette taxes would only come at the end of the Assembly, and still depends on a change of heart by enough Assembly Republicans, who went into the session vowing to oppose tax increases.

So the cigarette tax, and many other factors in the budget, are still open questions, Favola said. “We’re going to have to wait before can give anybody any indication of what we’re going to do .”