It’s a statement used with such regularity this time of year that, to some, it’s become almost a running gag.
But this time, Arlington County Board Chairman Katie Cristol says, the eight words are a true reflection of reality.
“It’s going to be a tough budget year,” Cristol said on Feb. 7, just weeks before the county government’s fiscal 2019 budget process kicks into high gear with the submission of a proposed budget by County Manager Mark Schwartz.
“Our needs are growing. We have some tough choices ahead,” Cristol told members of the Arlington County Democratic Committee.
The political problem for county officials: Overall real-estate assessments released in January increased just 1.9 percent from 2017 to 2018, well below an earlier projection of 3.2 percent and concentrated in the residential sector – which means any increase in the real-estate tax rate, if one occurs, will fall squarely on homeowners.
According to county officials, the average value of residential properties – single-family, attached and condominiums – rose 3.9 percent from 2017 to 2018. And homeowners, unlike office buildings, tend to take it personally – and take it out on politicians – when their tax bills spiral upward.
County Board members late last year directed Schwartz to prepare a budget package with no increase to the existing real estate tax rate of $1.006 per $100 assessed valuation, which means his proposal likely will include a list of potential cuts to existing programs.
The county manager is set to preview his spending plan to board members at a Feb. 22 work session, then formally present it two days later.
Despite their direction to Schwartz, members of the County Board could end up increasing the tax rate, as they did last year when they bumped it up 1.5 cents per $100 assessed valuation to pay for schools and Metro needs.
Some components of the commercial real estate market – hotels, retail and apartment buildings – saw year-over-year increases in average assessed value this year. But office-building assessments declined significantly, 6.9 percent, due to the ongoing higher-than-normal vacancy rate and lower rents in some corridors of the county.
Office buildings represent about 18 percent of the county’s overall tax base, and are cherished by county officials because, unlike households with school-age children, they are a net plus to the government’s fiscal bottom line.
County Board adoption of the fiscal 2019 budget, and setting of tax rates, is slated for late spring. The budget goes into effect July 1; real-estate taxes are due in equal installments in June and October.