Board Approves Tax and Fee Increases To Help Augment Schools, Infrastructure

By Kirstin Downey
Washington Post Staff Writer
Sunday, April 20, 2008

The Arlington County Board yesterday adopted a spending plan for the coming budget year that will impose numerous tax and fee increases but also seek to address some of the county's serious long-term infrastructure and funding problems.

The average homeowner's real estate tax bill will climb $104, but about 30 percent of homeowners will see their bills decrease because of falling real estate values, officials said.

The county operating budget, which pays the day-to-day costs of running the government, will climb to $486.6 million, up 5.7 percent. But new taxes will expand Arlington's overall budget to $1.18 billion, including funding for schools, retiree health benefits and storm water and transportation improvements.

The real estate property tax rate will rise 3 cents, climbing to 84.8 cents for each $100 of assessed value. A special 12.5-cent tax on shopping centers and offices will be introduced. In addition, residents and businesses will pay more for solid-waste removal, water service connections, fire inspections, ambulance services and permit fees.

"This budget ensures the County's ongoing fiscal health, provides our residents with the high-quality services they expect and reinforces the safety net for our most vulnerable residents," board Chairman J. Walter Tejada (D) said in a statement.

The Arlington Civic Federation had urged the county to rein in spending instead of imposing additional taxes. At yesterday's meeting, fiscal activist Wayne Kubicki said county officials had boosted the budget again instead of tightening it as revenue growth slows.

"We've been told, again and again, that such growth is not sustainable," he said. "Yet you're about to do it once again."

Under the new budget, county employees will not receive a cost-of-living adjustment, although many will qualify for regular step increases. Instead, the county is setting aside money to ensure that county retirees continue to receive one of the best benefit packages in the region.

Two cents of the property tax increase will be used to make payments toward future retiree health benefits, a requirement imposed by new national accounting standards. The rest of the increase's revenue will be used to rebuild and maintain the county's storm water drainage system, which has been rapidly deteriorating.

The increase in the commercial property tax rate, which the General Assembly authorized last year to fund transportation improvements, will generate $10.4 million this fiscal year and $20.8 billion next year. The money will be used to improve access at Metro stations, design and build a streetcar line along Columbia Pike and construct a transitway through Crystal City to Potomac Yard.

Kubicki said that the board was "clobbering" the business community with assessment increases and the new transportation tax, noting that for some businesses, county taxes might rise more than 30 percent.

Vice Chairman Barbara A. Favola (D) was the only person on the five-member board to vote against raising the commercial real estate tax rate. She said that large property owners will pass the additional taxes on to their tenants, which include mom-and-pop delicatessens and small stores.

"At what point do we reach our taxing capacity? At this point, I think we may be close," she said. "I worry the impact on small businesses may force layoffs or even closures."

Favola also said that a few areas, including the Metro and Columbia Pike corridors, would disproportionately benefit but that the cost would be borne throughout the county.

Board member Chris Zimmerman (D), chairman of the Northern Virginia Transportation Authority, said the extra tax was needed because of court rulings and state legislative decisions that have had "a pretty devastating effect on transportation funding" in recent months. "The one part that is left is the commercial surcharge," he said.

Under the new budget, the household solid-waste rate will increase by $10.76, the water rate will climb by 1 cent and the sewerage rate will go up by $1.33. The fees for water service connection, which have not been changed since 1990, will rise substantially. A line that now costs $3,600 to install will instead cost $4,800.

Parks and recreation fees are also going up. The annual membership fee at county fitness centers will climb from $145 to $170.

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