Budget Proposal Raises Taxes and Fees
Decade-Long Spending Spree Ends, With Cuts Planned in Various Areas

By Kirstin Downey
Washington Post Staff Writer
Wednesday, February 27, 2008

Arlington County residents would face higher taxes and fees and reduced services under a budget proposal released by county officials yesterday.

County Manager Ron Carlee proposed a $924.6 million spending plan for the coming fiscal year that would increase the real estate tax rate by 2 cents, institute a 1.4-cent sanitary district tax to pay for storm water improvements and raise the commercial property tax rate by 12.5 cents to pay for road improvements. The average homeowner's tax would increase by $126, with the bill rising to $4,523 from $4,397, officials said.

Under Carlee's proposal, the county's operating budget would increase to $575.9 million, which would be $24.5 million, or 4.7 percent, more than last year's. The school system would receive $348.7 million, or $17.4 million more than last year.

But the proposal cuts about $1 million in expenses by paring costs in a variety of ways, including reducing library hours, eliminating staff at the Powhatan Springs skate park and eliminating the annual county employee picnic, which cost $30,000 last year. County employees would not receive cost-of-living pay increases, and new limits would be placed on health-care spending for employees and retirees.

"It's a mixed story," Carlee said of the budget for the fiscal year that begins July 1. "We're trying to deal with long-term issues while we recognize there are things in the short term we can't do. This budget is about sustainability."

Fees for a number of services would be increased under the proposal. Residents and businesses with faulty security systems would be charged $100 for their third false alarm, up from $50. The cost for county-sponsored tot camps would increase to $104 a week, from $90. And annual fees at county fitness centers would rise, as would building permit fees.

Without the tax and fee increases, the county would face a $4 million budget shortfall, officials said.

The belt-tightening is unusual for Arlington, which prides itself on the plush array of services and amenities it offers its residents. But the reductions are less severe than those being proposed in some Washington area jurisdictions, which are struggling with worse economic scenarios, including surging foreclosure rates and rapidly declining home prices. In Arlington, home prices have fallen, but only slightly, and foreclosures have risen, but much less dramatically than elsewhere.

Still, the county's decade-long spending spree, during which it renovated Washington-Lee High School at a cost of more than $100 million, has come to an end. Carlee has told employees and board members that the county is carrying too much debt and that some long-sought community improvements might need to be postponed. Among the projects that could be deferred is the proposed renovation of Wakefield High School in South Arlington.

Schools Superintendent Robert G. Smith said that the Wakefield improvements are needed and that any decision on capital improvements would be made jointly by the community, the County Board and the school system.

The proposed budget provides funding for a few new projects, including the Westover library, playing fields at Long Bridge Park, formerly known as North Tract, and the Arlington Mill Community Center.

State budget cutbacks are likely to have a negative impact as well, though Arlington officials do not know the extent of the shortfall. About 7 percent of Arlington's annual budget comes from the state.

The county also faces a difficult challenge in meeting a new national accounting requirement that it create a special fund to pay for retiree health benefits in the future because its benefit plan has been more generous than those of other local governments. The county has a $516 million deferred liability for the cost of health care and will set aside $3.5 million to $5.5 million each year to build up a trust fund to cover the cost.

About 1 cent of the proposed 2-cent tax increase would go toward that fund, which will help protect the city's triple-A bond rating, said Mark Schwartz, the county's director of management and finance.