Arlington could see its much-touted AAA bond rating slump if the state does not guarantee new funds to replace the car tax being eliminated by Gov. James S. Gilmore III (R), the incoming County Board chairman, Barbara A. Favola (D), warned yesterday.
Arlington's AAA-Aaa bond rating -- bestowed on the county by Wall Street credit arbiters Standard & Poor's and Moody's Investors Service -- is a "great source of pride to Arlington," Favola said.
The rating also guarantees that the county pays a very low interest rate on the money it borrows to build schools and make other improvements to public facilities. If the bond rating declines, county taxpayers would have to pay more in interest.
Favola, who is to be sworn in as chairman tomorrow, warned that "actions by the state government could erode our foundations for this rating."
Even though the state has promised to make up any revenue local governments lose because of the disappearing car tax, there are no guarantees that the arrangement will last indefinitely. And that, Favola said, "makes bond rating companies very nervous."
Lila Young, a spokeswoman for Gilmore, said the state cannot make promises with the taxpayers' money. "It's not the government's money to give away," she said. "It's important to remember that the money started with the taxpayers and belongs to them."
Improving the county's economic outlook was one of four priorities Favola cited for the coming year. The three others were transportation, affordable housing and the environment.
The major transportation issue facing Arlington is the proposed expansion of Interstate 66. Gilmore and Rep. Frank R. Wolf (R-Va.) are pushing to add more lanes to I-66, Northern Virginia's main east-west corridor, despite a 1977 agreement by then-U.S. Transportation Secretary William T. Coleman Jr. The county has threatened legal action over the proposed expansion, but Favola said yesterday that she doubts the matter will go to court.
"I think the battle is going to be in the General Assembly and not in the courtroom," she said.
Favola called Arlington's supply of housing for low- and moderate-income residents a "crisis," and she vowed to act on recommendations expected shortly from a county task force.
Of Arlington's 85,000 units of housing, Favola said, fewer than 500 are affordable for families with incomes of $25,000 a year or less.
On the environmental front, Favola applauded outgoing County Board Chairman Paul F. Ferguson (D) for his work in establishing a policy that allows developers to apply for increased density of development based on the environmental soundness of their designs. Favola said she wanted to build on that record. She said she will focus on controlling storm water runoff to help clean up Chesapeake Bay.
As is its custom, the County Board will convene at 11 a.m. Jan. 1 to announce its goals for the year. It will be Favola's first meeting as chairman, a rotating one-year post, and the first meeting for newly elected member Charles Monroe (D).