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Real Estate Tax Rate to be Cut

Residents will most likely still pay more because of 18.25 percent average increase in home assessments.

The County Board is poised to lower the real estate tax rate next month, but no matter how much the members cut it, Arlington residents will most likely be paying more because of the sharp rise in home and condominium assessments.

THE AVERAGE single-family home increased in value by 18.25 percent this year, to $541,000. The average residential condominium rose in value by 19 percent to $367,000.

Arlington residents will have the opportunity to voice their opinion on what the tax rate should be during a March 30 public hearing.

For the forum the County Board has advertised the current tax rate of $0.878 per $100 of assessed value. Under Virginia law the board cannot adopt a real estate tax rate above what has been advertised.

Yet the board members made clear during their March 14 meeting that the tax rate will decline.

“All five of us freely admit we will adopt a number lower than advertised,” said County Board Chairman Chris Zimmerman. “It is too early for us to know what combination of revenue will be adopted… we don’t know what the outcome will be.”

County Manager Ron Carlee set aside funds for a five-cent cut in the tax rate as part of his $807 million proposed budget for fiscal year 2007. Last year the County Board decreased the tax rate by eight cents.

If the five-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. If the tax rate does not change, families would pay an average of $734 more in 2006.

The real estate tax payment on single-family homes has increased by at least 17 percent in the past five years. The average Arlington house was worth $224,000 in 2001, compared to the current price tag of $541,000.

FOR MORE than two decades, Arlington has had the lowest real estate tax rate among major jurisdictions in Northern Virginia, thanks mostly to the even mix in the county between commercial and residential properties.

Arlington will most likely relinquish that title this year, as Prince William County is expected to pass a lower tax rate.

County Board member Jay Fisette said in an interview that he would like to lower the tax rate beyond the five cents the County Manager has proposed.

“It continues to be my hope that we will be able to reduce it,” he said. Fisette said he will be able to make a more informed decision once he has received the county’s mid-year financial report.

Further lowering the tax rate would mean the board would have to cut other county services.

“We are trying to get a tax rate at a level that mitigates the impact on homeowners as much as possible,” Zimmerman said. “[The Board will] work to get something that is a reasonable balance.”

The board faces “some hard choices” in the coming weeks, Zimmerman said, but he believes there is a chance the tax rate will be cut by at least five cents.

County Board member Barbara Favola said it was too early in the process, especially before the public hearing or the completion of the board’s budget work sessions, to discuss any specific figures. She cautioned that a deep tax cut would imperil county programs and services.

“The bottom line is that we want to maintain a community that cares for its citizens,” Favola said. “We have to see what services are at risk and what other ways there are to provide those services.”

During the March 14 meeting Favola also urged the county to generate new revenue streams so that the Arlington government becomes less dependent on residential real estate taxes.

Tim Wise, president of the Arlington County Taxpayers Association, is asking for the board to cut the rate by 10 cents, a figure he admits the members are unlikely to adopt.

“This year it’s going to be up to the citizens to tell the board that cutting the real estate tax rate has to be the No. 1 priority,” Wise said.

MEANWHILE, the County Manager has proposed a significant increase for residents’ water and sewer bills. He is calling for a $0.19 raise in the water rate, from $3.02 per thousand gallons to $3.21, and an increase of $0.68 in the sewer rate, from $4.11 per thousand gallons to $4.79.

If the rate changes are approved, residents would pay an additional $69.60 per year for water and sewer services.

Additional rate increases are expected to continue for the next five to 10 years, at a rate of up to 15 percent, county officials said.

The County Manager is also calling for an $11.60 jump in the household solid waste rate, in order to keep the cost of collection and disposal of waste covered by fees. If approved, households would pay $260.36 per year for solid waste services.