Arlington Brief: Dealing with Projected Budget Gap

Arlington Brief: Dealing with Projected Budget Gap

The County Board directed the county manager on Nov. 19 to develop a balanced proposed budget for Fiscal Year (FY) 2017 that assumes no tax rate increase and includes options for county budget reductions, excluding the schools.

The projected budget gap for FY 2017 is more than $15 million, which includes more than $12 million for Arlington Public Schools, based on APS’s initial forecast, and $3 million for county government.

The board emphasized the importance of maintaining long-term financial sustainability and preserving the county’s triple-AAA bond ratings.

The board approved the guidance by a vote of 5 to 0.

Increases in expected county costs to maintain a current services budget are in the areas of employee compensation, healthcare, contractual services, debt service and funding for Metro.

The current projected funding gap maintains the current real estate tax rate of $0.996 per $100 of assessed value (including the sanitary district tax). The gap includes no program expansions, or increases in demand for services.

If tax revenues exceed the current forecast of 2.4 percent growth, the board advised the manager to propose optional uses for the additional funding, including a tax rate reduction, and applying the revenue toward priority demands, such as student enrollment growth.

The county is projecting the overall real estate tax base to rise 2.7 percent, with residential real estate assessments rising approximately 3 percent, while commercial assessments are projected to be flat or slightly negative.