Arlington Board OKs Spending Cuts, Tax Hikes to Close $50M Budget Gap

The Arlington County Board this weekend authorized a mixture to spending cuts and tax increases to close a projected budget gap of up to $50 million for the local government and school system next year.

It's the beginning of a long budget process, one that showed elected officials might already be divided on how to best realize the county's commitment to preserving affordable housing.

Board members approved their budget guidance to County Manager Barbara Donnellan on Saturday with a 3-2 vote. Vice Chairman Walter Tejada and board member Chris Zimmerman voted against the direction after failing to push through stronger commitments to preserving affordable housing.

Chairwoman Mary Hynes said she wouldn't rule out additional investments in that area, but that she would not make that decision in the context of guidelines for the county manager.

"This is the beginning of the process," Hynes said. "There's much to come. The board holds many tools in its control as we move through, including the tax rate."

The board already had agreed to continue to fund the county's Affordable Housing Investment Fund, or AHIF, which subsidizes housing for low- to moderate-income families, at the same level as the current spending cycle — a near-$9.5 million commitment.

That wasn't enough for Tejada and Zimmerman, who tried to force the county to commit to an annual $25 million AHIF investment — and to create a special tax district to benefit affordable housing and small businesses in the Columbia Pike corridor.

Tejada specifically asked the county to increase its AHIF commitment incrementally over the next four years to reach the $25 million annual investment. He and Zimmerman argued that for the county to simply continue to do the same isn't enough to keep up with the county's escalating housing crisis.

"The clock continues to tick," Tejada said. "And I don't know of any rent that's going down."

Tejada and Zimmerman have tried twice in the past year to accomplish similar objectives. Saturday's proposals didn't sit well with all of their colleagues.

"Are you kidding? Is this the same thing we dealt with twice earlier this year?" board member Jay Fisette asked. "I'm just a little frustrated by having this debate constantly. In fact, I'm afraid the advocates are going to hurt themselves if they keep doing this."

Fisette argued that in the face of economic uncertainty, the county already was going beyond the call of duty by taking its AHIF investment off the table as county staff begin to prepare the budget that would go into effect next summer.

Committing to tripling the AHIF investment without knowing what financial constraints the county will be under in the next year would be "irresponsible," he said.

The board, too, has asked that the feasibility of a special tax district to benefit the Columbia Pike corridor be included in a study due in the latter half of 2014.

"Government is all about trade-offs. And the more information we have, the better we are to make those trade-offs," board member Libby Garvey said.

But Tejada and Zimmerman pressed the point. The county has identified and agreed upon specific affordable housing goals. Tejada said without funding those goals, the county was simply paying "lip service" to those who wanted to see them realized. Zimmerman said the timeframe wasn't as important as the actual commitment — that the county could or should agree to meet the $25 million funding threshold by some point.

"We either are willing or not willing to commit the resources — at least in some timeframe," he said. "Otherwise, what's the point of adopting the goal?"

Zimmerman tried to push through separate direction that would require the county manager to analyze the number of committed affordable units in Arlington versus the county's target and, in the case the two aren't in sync, to provide options on how to reach those goals. That failed, too.

"The problem is we're losing a lot of opportunities now, and it becomes harder to make up ground later — especially in the Columbia Pike area," Zimmerman said. If the county doesn't have the capital ready to invest in affordable housing, then when the inevitable redevelopment of Columbia Pike begins, the county will lose its opportunity to preserve affordable housing and properties are sure to become home strictly to high-income families, he said.

The county's projected budget gap comes in the face of new or increased funding that will be needed for projects like ConnectArlington, Arlington Mill and the county's franchise agreement with Comcast.

Donnellan already has ordered a hiring "slow down," which affects staff vacancies, and she has authorized early retirement for qualifying staff, according to a news release.

The county is projecting as little as a 1 percent increase in real estate assessments, the release states. Residential assessments could increase as much as 2 percent, though commercial real estate is forecast to stay virtually flat.

The county, too, is expected to face increasing costs for employee compensation and healthcare, along with funding commitments to Metro and debt service.

Donnellan and Arlington Public Schools Superintendent Pat Murphy will hold a forum to gather public input on budget strategies at 7 p.m. Nov. 29 at the Washington-Lee High School cafeteria.