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Learning From the Past

In 1970s, 1980s, County Boards responded to rising assessments with low tax rates. Now current and former Board members say those tactics are unfeasible.

Facing huge jumps in real estate assessments, County Board members turned to tax rates as a way to ease homeowners’ burdens. Assessments jumped almost 80 percent over the last five years, and in response, the board ended up lowering the tax rate by almost 18 cents.

It wasn’t 2004 though — County Board members won’t decide on the current tax rate for another two months. It happened in 1990, and a decade before. In 1981, another County Board faced assessments that had doubled in six years. Over the course of those six years, Board members responded by cutting the property tax rate by a third, from $1.49 in 1977 to $0.96 in 1981.

Those were different times, said Wayne Kubicki, a member of the county’s Fiscal Affairs Advisory Commission

“Previous board have made a sizable dent. You can’t expect a rate cut equal to the assessment increase; that’s effectively flatlining revenues. But this group’s spent that, or most of it.”

Those tax cuts happened over a half-dozen years, though, and members of the County Boards that made those changes agree: such rate cuts couldn’t happen again.

“There have been so many changes in the community now. Expectations are much higher,” said Ellen Bozman, a County Board member for 23 years. “People’s idea of need has changed.”

One of her former colleagues agreed. “It’s impossible to compare one era to another,” said John Milliken, a 10-year County Board member, now an attorney with Venable Baker. “We’re talking about 15 years later. We were in an era of declining school populations.”

Bozman and Milliken served together on three County Boards making significant tax rate cuts in the face of rising assessments. In 1981, board members cut the tax rate by 16 cents when the total value of property in the county jumped by almost a quarter. In 1988, with Milliken as chair, that year’s County Board cut the tax rate by three cents following a 13 percent jump in total county property values, and the next year, with Bozman at the helm, County Board members cut tax rate by 11 cents — a 13 percent cut in the rate.

Changes in assessments were in some ways coincidental, said Milliken. “During my era, what the board did was look at the needs of the community first. Once you determine those, you determine revenue to meet those needs,” he said. “You pay a lot less attention to whether assessments are up or down.”

<b>ASSESSMENTS GOING UP</b> or down in those days meant less about what homeowners paid, said current Board member Chris Zimmerman. In the early 1980s, “they were first getting the big development of properties in the Rosslyn-Ballston corridor,” he said, and there was an explosion in the amount of commercial space in the county.

That meant the board could lower taxes and still collect substantial revenues from businesses. “They had the ability to shift the tax burden away from taxpayers,” he said.

In Arlington’s recent past, though, the situation has been reversed. “Commercial has been relatively stagnant,” said Zimmerman. “Since we have to charge the same rate all the way across the board, it basically means shifting the burden back from commercial onto residential [property owners].”

<b>AT THE SAME</B> time, the county is expected to pay for more than it did in the 1970s and ‘80s, said Bozman. “In earlier days, we could spend less and be frugal, but pretty much meet what were the real needs. That definition of need has changed. There are so many more facilities now, which is what people want, and they cost more.”

She pointed to the cost of outfitting and renovating Arlington schools. “People expect to have things in schools that we didn’t expect to have 20, 30 years ago,” said Bozman. “So 30 years ago schools were just classrooms.”

There are other burdens on the current board members, burdens left over from years of rate cuts. “There was a long period where the county underinvested in infrastructure, and probably cut taxes more than they should have,” said Zimmerman.

Bozman agreed. “The word for many years was quite frugal on capital,” she said. “When you think you’re in a bind, capital is one of the first places you cut. Because in a sense, it doesn’t effect people’s lives, it doesn’t effect the services people receive, it doesn’t cut county employees out of jobs.”

Such cuts couldn’t last, said Zimmerman. “Our libraries were slipping, our jail was a disaster, our courthouse was falling apart. We had poor facilities, and we had to play catch up.”

County Board members in the 1990s played catch up with low tax rates and falling assessments, raising tax rates from $0.765 for every $100 of a home’s assessed value in 1990 to $1.023 in 2000 — a decade when county property values first fell by almost 3 percent, then rose by almost 20 percent.

Keeping the county running over that decade “took a lot of investment,” said Zimmerman. “Now those are things we have to pay for” in the form of debt service on county bonds issued to pay for those capital costs.

<b>METRO COSTS HAVE</b> also increased over the last 20 years, adding a burden on county budgets that Board members in the 1970s didn’t face. “It wasn’t until about 1977 that we had any public transportation costs,” said Bozman. “That made a huge change.”

There was a large payment towards Metro when the system opened its doors. But like other county facilities, the system began to show signs of a lack of investment, said Zimmerman. “They made a substantial investment at first, and then we rode on that for a while,” he said.

It showed up in the quality of trains and buses. On Metro trains, doors started to have problems closing. “At one point, we had one of the oldest bus fleets in the nation,” said Zimmerman. “The Metrobus that came by my house when I first got on the Metro Board was a 1964 GMC bus. Fifteen years is a good run for a bus, and we were running buses that were 30 years old.”

Since then, the county has increased the size of its Metro investment, contributing $10 million a year to the system for five years, a contribution that has increased to $11 million in last year’s county budget and continues in County Manager Ron Carlee’s proposed budget for next year.

But Bozman, with years of cutting tax rates under her belt, isn’t agitating for such payments to end. “It’s a good county we live in,” she said. “It’s certainly better than it was.”