In the County Manager's Memorandum of Recommendation to the County Board, Anton Gardner states that the Fiscal Year (FY) 1998 Proposed Budget identifies $0.8 million as the amount of "revenues needed" to balance the proposed base budget. Additionally, there are other School and County funding issues to be considered, as well as potentially adverse fiscal impacts from revised state budget recommendations and other legislative changes pending in the General Assembly. An increase in the real estate tax rate is one of several options the County Board may wish to consider in closing the revenue gap for FY 1998. The advertised rate becomes the maximum rate which may be adopted by the County Board; therefore, advertising a rate of $1.01 provides the County Board flexibility when considering revenue options or program and service reductions and increases for FY 1998. The real estate tax rate will be set at the County Board meeting on April 12, 1997, after the budget and tax rate public hearings (scheduled for March 4 and March 6, 1997, at Kenmore Middle School) have been completed.
BACKGROUND: The FY 1998 Proposed Budget, presented on February 8, 1997, reflects a CY 1997 increase of 2.20% in real estate value. This increase is comprised of a net 1.55% increase resulting from reassessments and reclassifications, and an increase of 0.65% attributed to new construction. Single-family residential real estate increased 0.19% due to reassessment and reclassification and 0.54% due to new construction. Condominiums decreased 1.69% due to reassessment and reclassification, and increased 1.60% due to new construction. Apartments increased 1.98% due to reassessment and reclassification, and 1.47% due to new construction. The commercial sector increased 3.94% due to reassessment and reclassification, and 0.20% due to new construction.
Based on the 1997 assessment data released in mid-January, the average assessment of a single-family residential dwelling has increased by 0.34%, from $185,400 in 1996 to $186,030 for 1997.
[Single-family residential dwelling defined. Since CY 1990, real estate assessors from area jurisdictions agreed upon a comparable definition of single-family residential property. The definition of single-family residential property includes all structures designed and used for occupancy by a single family. This includes detached dwellings, semi-detached dwellings, townhouses, and individual condominium and cooperative units. This definition captures the value of the nearly 50,000 residential housing properties in Arlington. The definition used in prior years represented the value of a much smaller portion of the housing market.]
At the current $0.96 tax rate, this higher assessment translates into a $6 annual increase in the average single-family real estate tax bill in 1997. At the proposed advertised rate of $1.01, the average single-family real estate bill in 1997 would increase by approximately $99, or 5.6 percent over the 1996 average bill of $1,780. The Tax Table [at the end of this article], displays ten years of history of assessed valuation and taxes. It should be noted that the single-family residential value is an average calculation, and it reflects the fact that 50% of single-family dwellings had their 1997 assessments remain unchanged, 30% decreased, while 20% increased.
Advertising a rate five cents higher than the current $.096 tax rate, would give the County Board flexibility in responding to citizen comments and suggestions during deliberations on the FY 1998 Proposed Budget. For reference, each one cent increase in the tax rate would result in increased revenue of approximately $930,000 for each of the two CY 1997 collections. If a one cent increase were to continue in CY 1998, when a three percent increase in the assessed value of the real estate tax base is projected, revenue would increase an additional $960,000. Thus, assuming implementation of a one cent increase for the June 1997 tax collection (in FY 1997), the October 1997 tax collection (in FY 1998), and the June 1998 tax collection (also in FY 1998), revenue would increase a total of approximately $2,827,000. A rate five cents higher than the current rate would generate $14,138,000.
Note: Home value is based on all residential property including single family detached, semi-detached dwellings, condominiums, cooperatives, and town house residences.
Source: Anton S. Gardner's Memorandum of Recommendation to The County Board of Arlington, Dated February 13, 1997, Subject: Advertisement of Proposed Real Estate Tax Rate, Attachment II
On February 22, 1997, the County Board approved County Manager Anton Gardner's recommendation to advertise a proposed Calendar Year 1997 personal property tax rate of $5.15, for the public hearing on March 6, 1997.
In the County Manager's Memorandum of Recommendation, dated Feb. 13, 1997, to the County Board, Anton Gardner states that in order to establish a personal property tax rate for Calendar Year 1997 (Fiscal Year 1998), it is necessary to advertise a proposed personal property tax rate at this time, prior to setting the rate on April 12, 1997, when the Fiscal Year (FY) 1998 budget is to be adopted.
"A resolution has been drafted proposing a $0.75 increase in the personal property tax rate. This would increase the current rate of $4.40 to $5.15 per $100 of assessed valuation on taxable tangible personal property, machinery, and tools. Due to the assessment method used by the Commissioner of the Revenue, Arlington's effective tax rate for vehicles would be $4.64, which ranks below the base rates for Alexandria and Fall Church. Pursuant to State law, the current tangible personal property of public service corporations and manufactured homes is taxed at the real estate tax rate of $0.96. It is proposed that the tangible personal property of public service corporations and manufactured homes would be taxed at the proposed real estate rate advertised "ceiling" of $1.01. Advertisement of the $5.15 rate gives the County Board the option of adopting any rate equal to or less than $5.15 after holding a public hearing on March 6, 1997. The FY 1998 proposed revenue budget estimates assume a $4.40 rate. Each $0.05 increase in the personal property tax rate would increase the FY 1998 revenue estimates by approximately $615,000. Therefore, a $0.75 increase would raise $9,225,000 in FY 1998...."
The personal property tax rate is being recommended for public hearing March 6 at the Kenmore Middle School, on the same evening as the public hearing on the real estate tax rate. By holding all tax rate hearings on the same evening, the County Board can consider all tax options at one time.