Comments at Arlington County Tax Hearing, March 26, 2026.
The proposed FY 2027 budget has the same bottom line as the FY 2026 budget–$1.69 billon–with 56 fewer employees, the elimination of one library and one athletic program, and a 4.8 percent tax hike (Budget Overview, pp. 4-6). Beginning July, 2026 every household will pay on average an additional $422 for a lower level of service (p. 29).
How can the County demand that you pay more for less? Because office revenue has tanked due to a 23.5 percent office vacancy rate. Gone are the days when Arlington’s commercial sector picked up half the County’s real estate taxes. Now the residential/commercial tax revenue split is 57% and 43% respectively (Budget, p. 135).
If the County were serious about turning this situation around, it would task Arlington Economic Development (AED) to recruit tax burdened NYC entrepreneurs to occupy vacant offices by relocating here.
For example, the income tax rate for wealthy New Yorkers tops at 10.9 percent due to a wealth tax imposed by then Governor Cuomo in 2021 and recently extended by Governor Hochul for another 5 years. The high end of the New York corporate income tax rate is 7.25 percent with additional surcharges. On top of that, New York County collects, on average, 0.71% of a property’s assessed fair market value as property tax.
Either way New York’s merchant class is tax burdened. In fact according to Politico “More than 40 percent of the [NY] state government’s revenue comes from a small number of very rich taxpayers. If they leave, New York’s finances would take a hit.”
Arlington is poised to take advantage of New York City’s tax crunch due to Virginia’s lower tax rates. Virginia has a maximum 5.75 percent personal income tax rate and a 6 percent corporate tax rate. Arlington County collects, on average, 0.8% of a property’s assessed fair market value as property tax. These rates total 12.55 percent. Comparable rates for New York County top earners total 18.86 percent.
Given the significant difference between Arlington County and NYC tax burdens, plus the likelihood of Mamdani inspired tax increases going forward, a lot of NYC businesses are heading for the exits.
AED could reduce the office vacancy rate and increase tax revenue by encouraging them to relocate here.