County Manager Ron Carlee has proposed a $807 million budget for fiscal year 2007, which includes no new programs and sets aside funds for a 5-cent cut in the real estate tax rate.
CARLEE’S PROPOSAL represents a 6.3 percent increase over last year’s adopted budget, yet contains no new county personnel or initiatives. Though Carlee said the county "continues to be in an extremely strong financial position," he cited rising construction, transportation, health care and utility costs as the reasons for the growth in the budget.
"The budget I have proposed to you is a sustainable budget," Carlee said during the Feb. 28 County Board meeting. "It is not a budget that does anything new, exciting or different."
County revenues are expected to increase by $74.2 million in fiscal 2007. The budget proposal also calls for a 6.8 percent increase in the amount of money Arlington schools will receive in 2007, as part of the county’s revenue sharing agreement with the school system.
The County Board will vote on the budget, and set tax and rate fees, during its April meeting. Public hearings on the budget and tax rates will be held on March 28 and March 30, respectively.
For more than 20 years, Arlington officials have been able to boast that the county has had the lowest real estate tax rate among major jurisdictions in Northern Virginia, thanks mostly to the balance in the county between commercial and residential properties.
Yet Arlington is poised to lose its title this year, as Prince William County is expected to pass a lower tax rate.
County Board member Barbara Favola said that retaining one of the lowest tax rates in the area is important, but the board has to weigh that objective against other priorities.
"If we’re second lowest, then we’re second lowest," she said. "We’re not going to wreck havoc on the budget just to make us the lowest in the region."
LAST YEAR the board slashed the tax rate by 8 cents, down to 87.8 cents per $100 of assessed value.
Arlington residents are likely to pay more this year, even if the board does cut real estate taxes beyond the manager’s 5-cent proposal. The average single-family home increased in value by 18.25 percent this year, to $541,000.
If the 5-cent tax cut is approved by the board, residents would see an average increase of roughly 11.5 percent in their real estate taxes, or $463.
County Board member Jay Fisette said he would like to decrease the tax rate beyond the 5 cents suggested by Carlee, in order to mitigate the financial burden on Arlington homeowners.
"It is my hope we will find a way to reduce it beyond 5 cents," Fisette said.
Further lowering the tax rate would mean the board would have to cut other county services. County Board Chairman Chris Zimmerman said it was too early in the process to begin talking specifics.
"We will go through the budget for the next month and a half, and listen to the public," Zimmerman said. "We have to balance the taxpayers' needs for relief" with the county’s other goals.
CARLEE’S BUDGET proposal is an exercise in continuity, with greater funding for some existing county services but no new initiatives.
"We’re trying to constrain the growth of the budget, and, except for market factors, have not brought anything new forward in this budget," he said.
The escalating costs of fuel, construction and labor are the primary reasons for the 6.3 increase in the budget. Construction costs alone have risen by 15 percent over the past two years, placing a strain on Arlington’s capital programs and forcing the county to reconsider the scope of several building projects.
"The cost of construction and debt service are only going to go up," said Barbara Donnellan, deputy county manager. "Every capital project is realizing this impact."
The county’s utilities and gasoline bills are expected to grow by 30 percent over the fiscal 2005 costs, and the county will have to pay 13 percent more next year to support Metro.
Other service cost increases include an extra $4.2 million to pay for debt and principal on capital projects, and $700,000 to upgrade the public safety vehicle fleet.
County employees will see a mandated 2 percent pay raise next year, and the budget includes the $3 million compensation package awarded to public safety personnel late last year.
Employee retirement costs are expected to grow by nearly 20 percent this upcoming year, and the county’s health care bill is set to expand by 10 percent, county officials said.
The proposed budget provides for an expansion of the Homeowner Grant program that was begun last year. Residents who qualify would now receive $600 instead of $500.
Carlee has also asked the County Board to raise the county’s living wage, for government employees and private companies carrying out county contracts, from $11.20 an hour to $11.80. The budget also contains an extra $1 million for greater support for door-to-door service for residents with disabilities.
In the coming weeks the County Board members will begin to work with staff on the budget proposal and take the advice of residents, service groups and civic organizations.
"The county manager’s proposal is just starting the process; He gets the ball rolling," Fisette said. "He puts it out there to begin the dialogue."