With no tax rate increases, the Arlington County Board is projecting a $24 million gap between revenue and expenditures for fiscal year 2016. At a County Board meeting on Nov 18, County Manager Barbara Donnellan advised the board that the county’s 2016 budget of $1.145 billion in expenditures $1.141 billion in revenue. The county-side of government is anticipating a gap of $4 million, but the larger concern is the $20 million gap in funding to the schools.
“With their estimates of what their expenses are and their other revenues, with their enrollment increase, we are looking at gap of $20 million,” said Richard Stevenson, budget director for the Office of Management and Finance. “This is the first year, recently, where we’ve had the disparity between the gaps for the public schools and the county.”
The school's proposed budget is $565.1 million compared to its current budget of $539.4 million.
Linda Erdos, assistant superintendent for Arlington Public Schools, said the school can’t afford to lose $20 million worth of services.
“We either need to get more money from the county or we have to cut $20 million worth of services,” said Erdos. “It’s an either/or situation. With the new school, we also need a new principal, new office staff, a new library ... we have to staff the school, or it’s just an empty building.”
But the county says the process will more likely come down to a compromise between the schools finding areas to cut and, potentially, additional funding from the County Board.
“We still have to have a lot of conversations with the schools,” said Stevenson. “Right now we’re dealing with revenue and expense projections. We’re going to be getting into a much more detailed level. Numbers will change. It’s not as black and white as ‘we get all our money or we have to cut everything’; it’s going to be a mixture.”
While Arlington is expecting positive revenue growth for 2016, it is outpaced by the expenditure growth. Real estate tax is projecting 3 percent growth, but all other taxes and fees are facing a growth of 1 percent or less. The County Board has combatted its own income gap by reducing its hiring and asking for budget reductions from its departments. But Moira Forbes, chair of the Arlington School Board Budget Advisory Commission, said they can’t reduce their budget in the same way.
“We can partially offset this with reductions and efficiencies,” said Forbes, “but we can’t close the entire gap.”
“We are having conversations with the community and in the next week or so we will be putting forward a priority list to the community,” said Erdos. “If we raise cost/fines, it would only generate less than $4 million. There are a lot of things we’re looking at. We could stop certain services, but the community values that. There’s a real push pull, there’s not an easy answer.”
The gap for the schools is largely driven by enrollment. In its 2014-2015 fiscal budget, Arlington Public Schools projected a growth of 897 students. The year before, the schools saw in increase by 703 students. With increased enrollment comes increased demand for new facilities. Arlington Public Schools are currently finishing development of one new elementary school and are in the design phase of a second. The construction of the schools was part of the school’s Capital Improvement Plan, which is not part of the yearly school budget, but staffing those new facilities is part of the increase for the school’s yearly operating budget.
Discovery Elementary School was built in northern Arlington, which was cited by the School Board as the area with the greatest overpopulation. The school is expected to open in fall of 2015. The county has been in the process of re-drawing the school boundaries to alleviate overcrowding in seven elementary schools. In 2014, some of the original school boundaries laid out of the new school were adjusted to reflect shifts in enrollment.
“This year, in September, as they were running projections, they noticed there would be some schools where enrollment was higher than they projected at some schools where boundaries changed,” said Frank Bellavia, public information officer for Arlington Public Schools. “They’re refining those boundaries to help adjust for those. It won’t affect as many kids as it did originally, but staff felt it was necessary to refine those boundaries.”
Forbes said that the costs that come with increased enrollment were not the direct result of actions by the School Board, and its impact couldn’t be significantly reduced by board actions.
“The cost associated with new students are immediate and significant,” said Forbes. “We understand and appreciate the challenge of balancing a budget, we get that, but in a year when total tax growth is expected to be more than 3 percent, the schools… are anticipating no increase.”
The 2016 budget guidance advised the County Board to maintain the 2015 revenue sharing of 45.9 percent to Arlington Public Schools. Forbes proposed that the County Board either offer an increase in the revenue sharing percentage or provide fixed amount, $20.1 million, to offset the funding gap. Michael Beer, co-chair of the Schools Committee at the Arlington County Civic Association, spoke at the County Board meeting and also advocated for an increase in the percentage revenue going to the schools.
“I’d like to encourage you to increase your percentage revenue going to the schools,” said Beer. “It’s been dropping over the past 10 years, from 48 percent down to 45.9 percent. I’d like you to bump that up given the tremendous pressure on the schools.”
Arlington County Board Chairman Jay Fisette said that the specifics of how that gap will be closed haven’t been worked out but said the numbers will change later in the budget process when the County Board has a more accurate idea of what revenue from taxes will be.
“We have worked for years to build the schools, it is a number one priority. The schools have growth, that’s their top priority,” said Fisette. “We have always met school needs and we will continue to meet school needs. The schools will get more funds as we get closer to April; we’re just six months away from resolving that.”