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Arlington’s office vacancy rate could mean budget cuts, layoffs

View of Rosslyn skyline in Arlington County, where commercial property vacancies are cutting into property tax revenues. (Jeffrey MacMillan)

The worsening commercial vacancy rate in Arlington County will require higher fees and $20.5 million in budget cuts and layoffs in the coming fiscal year, but the property tax rate can stay the same, county manager Mark Schwartz said Thursday.

Schwartz unveiled a $1.27 billion general fund budget, up 1.7 percent since last year, that would improve pay for firefighters and police, add $13.4 million for schools and move the county’s affordable housing program to a more stable financial footing.

Residential property tax bills would increase an average of $297, because home values have grown 3.8 percent. Utility taxes would also rise, and there would be jumps in parking rates as well as the cost of letting the meter expire.

“The difference of where we thought we were going to be in October and where we are now is a result of the commercial vacancy rate, which popped to 19.4 percent,” Schwartz said before presenting his recommendation to the County Board. “It’s the underlying challenge we face.”

The commercial vacancy rate has been a persistent bugaboo in the past few years for Arlington, which strives to get half its property tax revenue from commercial owners.

If Schwartz’s proposed budget is adopted, the tax revenue split would be 52 percent residential and 48 percent commercial. The tax rate is $1.006 per $100 of assessed value for both homes and businesses. Buildings that are vacant qualify for a tax break.

The average household in Arlington would pay $6,447 in property taxes, but personal property taxes, a refuse fee, a utility tax, and water and sewer service bills would push the tax burden to $8,743, county budget documents say.

Schwartz proposed saving money by reducing the county workforce by 48 positions, 18 of which are vacant. The Department of Human Services would lose the most employees, outsourcing pharmacy and blood-testing services and laying off six employment counselors. The four-person community health office and the relatively new position of poet laureate would be eliminated, and several departments would lose administrative support jobs.

Most remaining employees would get a pay raise ranging from 3.25 to 3.5 percent. But Schwartz proposed hiking firefighter pay an additional 4 percent and police pay another 2.5 percent because of rising salaries and job competition in the region.

There would be no more entertainment at the Long Bridge Park Fourth of July celebration; a free paper-shredding service for residents would be eliminated; the Lee Highway planning process would lose two-thirds of its expected funds; and the quarterly county newsletter, The Citizen, would go out of print.

The County Board will vote on a final budget proposal on April 21.