Arlington homeowners are facing a prospective double whammy of higher assessments coupled with an increased tax rate under the fiscal 2022 budget proposal unveiled yesterday by County Manager Mark Schwartz.
Schwartz recommends no change to the general tax rate, but is seeking an increase in the mandatory surcharge all property owners pay for stormwater infrastructure.
That increase, coupled with assessments that grew on average more than 5 percent from 2020 to 2021 due to the hot real-estate market, means typical homeowners will have to dig deeper to the tune of hundreds of dollars to fund government operations, assuming County Board members enact tax rates similar to those proposed by Schwartz.
The budget blueprint represents “a path forward” to a post-pandemic world, “ensuring we have a strong, resilient county government when we emerge,” Schwartz said in a statement.
Schwartz’s proposal calls for a tax rate of $1.03 per $100, up from $1.026 per $100. The regular tax rate would remain flat at $1.013, while the stormwater surcharge would rise from 1.3 cents to 1.7 cents.
When coupled with an average home-assessment increase of 5.6 percent over the past year, the owner of a home assessed at $900,000 in 2020 – and had a tax bill of $9,234 – would see that assessment rising to $950,040 and the tax bill up to $9,789. That’s an increase of 6 percent.
In all, Schwartz’s proposal calls for $1.36 billion in General Fund spending, a 1.4-percent increase over the current year, including a transfer of just under $530 million to the county school system, up $5.1 million from the pared-down total school officials received for the current school year.
(How that increase will impact per-student costs remains to be seen; about 5 percent of parents have fled the county school system this year, presumably over the lack of in-person learning, and how many will ever come back remains at best a guesstimate.)
The county manager’s proposal calls for elimination of 56 positions that have been vacant since the onset of the pandemic, plus $16.4 million in cuts and the use of holdover funds to fill in gaps.
While some areas of the budget will take a budget licking, others that critics deride as playthings of county leaders like “missing-middle” housing and equity programs, will keep on ticking.
The proposal on Saturday goes to County Board members, who can – and in the past have – advertised a higher tax rate than proposed by the manager, to give themselves flexibility later in the budget season.
The likelihood that homeowners were going to take it on the chin this year was apparent when assessments were released in January. While home prices were up substantially, values in the commercial sector were down 1.4 percent, led by a steep decline in the valuation of hotels – no surprise, perhaps, given the impact of the pandemic, but resulting in the need for the county government to get the additional budget money somewhere.
Real-estate taxes account for nearly 60 percent of all county-government tax revenues, and growth in assessments has helped fuel growth in a budget that now tops $1.3 billion a year and in fiscal 2022 will be closer to $1.4 billion.
After the assessment data arrived, new-for-2021 County Board chairman Matt de Ferranti declined to commit to setting a tax rate without an increase.
“What I can say is that I want to avoid an increase in the property-tax rate if at all possible,” de Ferranti said then.
County leaders predict a “difficult” budget season, but that phrase is used almost every year no matter the conditions. Early in the budget season, County Board members will advertise a maximum tax rate, which will be the highest the county government will be able to impose. The final budget will be adopted, and the tax rate will be set, in late spring.
The county government’s fiscal 2022 budget goes into effect July 1, although the real-estate tax rate set by the government will cover calendar-year 2021. Property owners pay their real-estate taxes in two equal installments in June and October.
Over the past half-century, Arlington’s real-estate tax rate has varied widely, from 76.5 cents per $100 assessed value for several years in the early 1990s to $1.532 per $100 for several years in the early 1970s. But that’s only half the equation, as the tax burden is dependent both on the rate and a property’s assessed valuation.