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Friday, August 19, 2022
ArlingtonHalf-billion-dollar bond referendum on horizon

Half-billion-dollar bond referendum on horizon

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Barring a surprise switcheroo this week, the Arlington County government is expected to send a bond-referendum package of six items totaling just over a half-billion dollars out to voters in November.

A total of $510.52 million, to be specific, was formally proposed by staff to County Board members during a work session leading up to a vote planned for July 19. At the work session, board members gave no indication they planned to make any changes to the package, and were unfazed by the stratospheric pricetag.

“When you do investment, it pays off big-time longer term,” said County Board member Matt de Ferranti, citing “pent-up demand” for capital projects based on decisions by the local government in 2020 and 2021 to restrain bond-package requests to see how the pandemic played out.

Under the staff proposal, bond issues – to be voted upon separately by voters – would include:

• $22.5 million for parks.
• $52.3 million for community infrastructure.
• $52.6 million for Metro and transportation.
• $165 million for schools.
• $39.8 million for stormwater.
• $177.4 million for utilities.

Several of the proposals represent “generational investments,” said Michelle Cowan, the county government’s top finance staffer, including nearly $140 million in support for the rebuilding of the Arlington Career Center campus and upgrades to the county government’s Water Pollution Control Plant.

“I feel like we’re doing the right, fiscally prudent thing,” she said.
After expected County Board approval of the package, it will be sent to Circuit Court Chief Judge William Newman Jr. (a former County Board member himself). He has the final say on placing the issues on the ballot, but court approval has not been withheld in living memory.

Information on the bond referendums will be advertised by the county government in the Washington Times – perhaps not the go-to news source for most Arlington residents, but one of the cheaper alternatives for legal advertising – and will be posted, in four languages, on the county government’s Web site.

While voter approval will give the county government authorization to sell general-obligation bonds up to the total amount approved, that does not mean those bonds will be sold immediately. It is often years, sometimes more than a decade, between voter approval of a bond and funding a project that was incorporated in it.

The 2022 bond package is almost assured approval; county voters have not turned down any bond referendum since 1979, and have not done a wholesale rejection of multiple bonds since 1975.

While bonds may be seen by some in the electorate as “free money,” they are having an impact on taxpayers’ wallets – and will have more of an impact with interest rates on the march.

Under long-standing Arlington government policy, total debt service on municipals bonds can rise no higher than 10 percent of the total budget in any given year. Arlington officials say this helps to retain Arlington’s coveted AAA ratings from multiple bond-rating firms.

But at the same time, the local government in recent years has come perilously close to reaching that 10-percent threshold, which could be one reason that, in the recent fiscal 2023 budget process, Arlington was nearly alone among Northern Virginia jurisdictions in not reducing tax rates despite big rises in real-estate assessments.

Lower tax rates would have meant less government revenue; less revenue would have meant a lower ceiling for total indebtedness; a lower ceiling for indebtedness would have meant the bond package would have had to have been scaled back, particularly now that higher interest rates have to be factored into the mix.

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