Comments At Arlington County Tax Hearing, March 27, 2025.
In a recent email to her constituents, County Board Member Susan Cunningham reported the County’s oft repeated canard that “Our property tax rate remains one of the lowest in the region.”
The tax rate is meaningless in the context of steadily rising assessments. What matters is the effective tax rate, i.e. what people actually pay in taxes. A comparative tax and fee table in the proposed budget shows that Arlington residents enjoy the highest tax and fee burden of any jurisdiction in Northern Virginia except Falls Church (Proposed Budget, p. 165).
Arlington’s average FY2026 effective tax rate increase is projected at $356 or about 3.2%, which is in line with the current rate of inflation and substantially less than last year’s increase of $577 (Budget Presentation, p.25).
So how did the County Manager appease the unions and award outsized pay increases to the police and fire departments without a tax rate increase? By robbing Peter to pay Paul.
The offsetting tax rate increases occur in the form of a meals tax that goes from 4 to 5 percent and massive increases in permitting fees (Budget Presentation, p.23). These hikes are so big, that the Chamber of Commerce, which usually agrees with the County Manager, objected. In a March 19 letter to the County, Chamber of Commerce CEO Kate Bates wrote:
“As inflation continues to have an impact upon spending habits, this [the meals] tax increase would discourage dining in Arlington and add financial strain to restaurants operating on razor-thin margins, while potentially leading to minimal gains in revenue.”
That’s an understatement considering the likely impact of massive area layoffs on the restaurant sector.
On the fee increases, Bates said: “the increases to the General Land Use Plan (GLUP) amendments, adaptive reuse amendments, and child care facility permits, run counter to established County goals and make Arlington a less attractive location for development and investment.”
This is also an understatement considering that a use permit for a childcare center will increase by 200% (CHPD Presentation, p.27). Development fees for a new home and a commercial project will increase by 49% and 64% respectively (CHPD Presentation, p.23).
With development costs like these who needs to start a business in Arlington? Come to think of it, who needs to construct a 6-plex? While the County may want to stop balancing bloated budgets on the backs of homeowners, this budget isn’t the way to do it.