The County Board directed the County Manager last week to draft a budget for fiscal year 2007 that increases spending but will not provide for new projects or government workers.
County Manager Ron Carlee will present his budget, expected to include an 8.4 percent rise in expenditures, to the board in February. Critics of the budget preview said the county government should truncate its spending as the real estate market begins to slow down.
“In order to ensure the sustainability of this government, we should not include any new programs and personnel,” said County Board Chairman Jay Fisette.
Both the County Board and Carlee will have to balance the competing interests of expanding county projects and providing tax relief to residents.
Local tax revenues are projected to increase by almost 12 percent in fiscal 2007, but the current level of growth “will not be sustainable for the long-term,” a report by Carlee stated. The county’s general fund expenditures have increased by an average of 7.1 percent over the last six years.
“We want this budget to be fiscally responsible and sustainable,” said county board member Barbara Favola. “This reflects the principles we have always governed Arlington by.”
THE AVERAGE RESIDENTIAL real estate assessment is projected to grow by more than 20 percent, the sixth straight year with a double digit increase. This means residents will pay more this year for county government and school initiatives.
Last year the average assessed value of a home increased by 24 percent, though the county cut the real estate tax rate per $100 of assessed value by five cents.
Virginia mandates a single tax rate for commercial and residential properties, so the strong real estate market has “led to greater and greater financial burdens” for homeowners, the county manager’s report said.
With real estate assessments expected to slow next year, and Carlee calling the county’s expenditure growth “unsustainable,” many in the county are urging the board to restrain spending for fiscal 2007.
The Fiscal Affairs Advisory Commission (FAAC) voted 9 to 0 last month to direct the county manager to restrict growth in expenditures to 5.6 percent.
“The current draft deserves a grade of ‘A’ for spotting the major issues that will dominate the budge, but deserves an ‘F’ for providing guidance regarding what to do about those issues,” said a report from Peter Rousselot, chair of the FAAC to Carlee.
County Board members acknowledged they faced difficult choices in crafting the new budget, with Paul Ferguson calling it a “tough budget” because of the county’s significant capital costs.
“We’re an aging community as far as infrastructure goes,” Ferguson said.
At the board meeting last week, several speakers questioned how the county manager could approve higher spending if he recognized that real estate assessments would soon drop.
“If 7.1 percent growth is unsustainable, why is the projection [for fiscal 2007] 8.4 percent,” Wayne Kubicki, who sits on the FAAC, asked the board.
In order to provide new avenues of tax relief for residents, the board could rescind the decal fee, enact a one-time reduction of the trash pick-up fee or annul the local sales tax on food, Kubicki said.
Burt Bostwick, chairman of the Arlington County Civic Federation’s Revenue and Expenditures Committee, argued that the board should return or credit to taxpayers the first 50 percent of generated surpluses for fiscal 2007.