The Arlington County Board on Saturday voted 4-0 to advertise a 5-cent tax increase ceiling for the spending cycle that begins July 1.
That means elected officials, as they shape the fiscal 2014 budget over the next few months, can opt to raise real estate property tax up to 5 cents per $100 assessed value, but no more than that.
A 5-cent tax increase would cost the average Arlington homeowner an additional $356 annually. In other words, the owner of a $524,700 home would owe $7,082 in taxes and fees for the year.
The ceiling agreed upon Saturday was noticeably higher than the 3.2-cent tax increase Arlington County Manager Barbara Donnellan recommended in her proposed $1.1 billion budget last week. Donnellan's budget would cost the average homeowner here an extra $262 in yearly taxes.
Sequestration, Uncertainty in Tax Debate
Elected officials were divided Saturday on the limit to place on themselves, given the high level of uncertainty this region faces thanks to the looming threat of federal sequestration.
The $1.2 trillion in cuts that will go into effect if Congress fails to reach a compromise by week's end would have a deep impact on Arlington's economy given the high number of federal contractors and federal employees here. And the ripple effects of Arlington families having less disposable income would be felt throughout the county's commercial sector.
Chairman Walter Tejada and board member Libby Garvey wanted to advertise a higher ceiling to give the county more flexibility. Vice Chairman Jay Fisette and board member Mary Hynes wanted only a 4-cent tax ceiling, saying the county should look for things it could do without as Arlington families are forced to do the same.
Board member Chris Zimmerman was absent Saturday. Garvey and Tejada opined that had he been there, the higher ceiling would have been approved.
The county has $3 million in a contingency fund that can be used to ease some of the pain of sequestration.
Beyond that, less flexibility gives area nonprofits and other special interest groups a smaller pot of money to lobby for. Donnellan said last week that her proposed budget does not include any increases in local government aid to nonprofits, a decision that already has generated a number of phone calls.
"For me, I want to send a message to the community that I'm not going to be interested in many new things, if any new things," Hynes said. "And strong cases are going to have to be made why we can't do what the manager has recommended."
Donnellan's budget includes $9.3 million in cuts, including the elimination of about 46 positions. About half of those are vacant; another 10 are police and fire jobs that would be cut through attrition as the county shifts from three community policing districts to two and reduces the number of floating fire personnel to fill in for firefighters who are sick or training.
Two affordable housing advocates asked the board to consider a higher ceiling. Tejada and Zimmerman have tried several times in the past year to divert more money into the county's Affordable Housing Investment Fund.
"It's important not to foreclose our options to deal with our needs. Let's give ourselves the flexibility to deal with these unknowns," said Susan Korfanty, a member of the Arlington Housing Commission.
Regular board critic Robert Atkins told the board that it was underestimating the potentially devastating impact of sequestration.
"This assumes too much will stay the same," he said of the proposed budget. "There is doom and gloom out there. Get ready for it, and don't be surprised when it comes."
The county has a number of budget work sessions planned, with public hearings set in late March for the budget and the tax rate.