Category: Taxes

County to Eliminate Tax Exemption for Apartment Renovations

Comments at Arlington County Board Meeting, March 21, 2020

Buried in the County Manager’s proposed FY21 budget is a proposal to repeal the partial tax incentive for renovating multi-family properties. Yes, you heard me. After all the song and dance about affordable housing, the County Manager wants to scrap the one program in the County’s arsenal of housing tools that actually delivers affordable housing. He wants to transfer the revenue stream of additional taxes to the County’s so-called affordable housing programs. Here’s the proposal:

“The Proposed Budget recommends repealing Partial Exemption for Certain Rehabilitated Residential Real Estate. At this time the Manager is recommending that the exemption for owners/developers of multi-family properties be discontinued and that the County Board should consider investing in the County’s affordable housing programs instead of providing tax abatements to renovated properties. Repeal of the ordinance will not impact the FY 2021 Budget. Current applications will be allowed to continue to utilize the tax exemption. It is estimated that the collection of otherwise foregone revenue will not be realized until FY 2022 or FY 2023. This is due to the normal delay which occurs from the filing of the application, construction and rehabilitation, and the ultimate assessment and billing for the approved exemption.”

Budget Book 87-97

This initiative is directly contrary to several goals outlined in the Affordable Housing Master Plan, among them to:

“1.2.1 Incentivize the production of moderately-priced ownership housing through land use and zoning policy.

“1.2.2 Encourage production and preservation of family-sized (e.g. 3+bedroom) moderately-priced ownership units.”

It’s also fiscally irresponsible. At $400,000 and up, the cost of construction of a so-called committed affordable unit (CAF) exceeds that of a luxury condo. Renovation of an existing market rate unit might cost $200,000 or less. Housing non-profits like APAH will tell you that the loans they get from the County to build CAFs are all paid back in the form of rent. What they don’t tell you is that these rents are heavily subsidized by taxpayers. So whereas tenants make out like bandits, the taxpayer is gouged.

Scrapping the tax incentive to renovate market rate units belies the County’s commitment to affordable housing and is unfair to taxpayers.

PRESS RELEASE: County Board Authorizes a Pay Grab

Did you know that on June 18 Arlington County Board voted to increase its salary cap from $57,337 to $89,851 for members and from $63,071 to $95,734 for the chair–for an increase of more than 50 percent?

When these caps are translated into actual pay increases, Arlington County Board members will have awarded themselves salaries on a par with the Fairfax County Board of Supervisors, which pays its members $95,000 and its chair $100,000.

As a candidate for Arlington County Board myself, I think this is excessive, because at $4.6 billion Fairfax County has more than 3 times the $1.4 billion operating budget of Arlington County and presumably 3 times as much work to do.

Arlington County Board members are evidently unconcerned about whether their actual work load justifies the salary increase, because they have a guaranteed revenue stream in the form of rising tax assessments.

Double Digit Real Estate Tax Increases On the Way

According to a June 13 report from the Northern Virginia Association of Realtors, housing price appreciation is expected to reach 17.2 percent in Arlington this year due largely to Amazon’s decision to open a new headquarters to Crystal City. This means a 17.2 percent increase in real estate tax assessments for everyone.

It’s up and out for those who can’t pay their tax bills. If you want to stay in Arlington and are concerned about whether you can afford to do so, then you should consider an Independent alternative.

If elected to County Board, you can be sure that I will seek tax relief for people priced out of their homes.

In addition, if elected, I pledge to:

  • Say NO to more tax rate increases and stop the exodus of businesses and federal agencies from Arlington.
  • Preserve green space and emphasize basic services like: streets, schools, libraries and public safety.
  • Promote transparency by requiring publication of official documents at least 72 hours before board and commission meetings.
  • Provide a voice on County Board for all taxpayers.

As a 15-year Westover resident, long-time civic activist and current member of the Transportation Commission–I have both the experience and independence to promote these reforms.

Arlington County Pays a Bounty to DEA Landlord

Comments At Arlington County Board Meeting, 4/25/19.

According to civic activist Suzanne Sundburg:

The underlying question in subsidizing the DEA lease is whether it is equitable to pick winners and losers (i.e., financially benefit some long-standing tenants and/or landlords, but not others). Those tenants and landlords not benefiting from a subsidy may be resentful of having their tax dollars spent to subsidize others’ rent when they cannot obtain the same benefit. Alternatives to targeted incentives include:

Suzanne Sundburg

1) low-interest or no-interest loans to landlords to pay for upgrades that result in retaining large commercial tenants, or

2) tax cuts financed by ramping back wasteful spending on “economic development” such that all tenants and property owners could equally enjoy the fruits of a tax-rate cut,  and/or

3) soliciting feedback from larger tenants in order to redress problems/irritants that are related to county bureaucracy, etc.

Aside from the inequitable nature of incentive payments is the question whether subsidizing particular tenants actually benefits the economy.

According to George Mason University’s Mercatus Center:

Moreover, targeted subsidies are most often used to benefit large, highly-visible corporations rather than small local businesses. As a result, struggling local businesses must pay higher taxes to fund public subsidies for politically well-connected larger corporations.  —“Amazon HQ2 Is the Only Competition Where the Losers Are Winners: Why Economic Development Subsidies Hurt More than They Help,” 11-13-18.

Mercatus Center

PRESS RELEASE: County Won’t Give Back Surplus Generated By Tax Rate Increase

Are you concerned about your steadily rising real estate taxes or rent? If so, you should know why the cost of living in Arlington County is so high.

It begins every year with the County Manager’s allocation of your surplus tax dollars for pet projects.

This year actual revenue received for the fiscal year ending June, 2017 exceeded a third quarter estimate published in April, 2017 by almost $18 million. Of that $5.5 million was due to a 1.5 cent real estate tax rate increase that County Board adopted in April, 2017.

Because the tax rate is set in April, County Board relies on its third quarter estimates in April to gauge how much additional revenue it will need in the next fiscal year. County Board knew in April, 2017 that a 1.5 cent tax rate increase was unnecessary, because its April revenue estimate exceeded the adopted FY17 budget by $7.5 million.

The surplus funds were available then to meet its anticipated FY19 shortfall. With the tax increase and other income and savings, the surplus ballooned to $25 million over the adopted budget by the end of the fourth quarter, June, 2017.

Instead of doing the honest thing and returning some of the surplus to the taxpayers, the County Manager wants to spend it on a list of pet projects that have not been vetted through the normal budget process. The projects earmarked for the surplus include:

  • $2 million for the Detention Center, even though half the money won’t be needed until FY19
  • $1.75 million for retroactive employee compensation, i.e. money that was not approved in the FY17 budget
  • $1.25 million for a County Manager contingent, even though the County maintains reserves in excess of $71 million
  • $.9 million for a study to purchase two properties that have already been studied to death by the Joint Facilities Advisory Commission (JFAC)
  • An additional $5.2 million for the Affordable Housing Investment Fund (AHIF) on top of its very generous budget of $15 million.

In addition the County Manager proposes to give $4.5 million of "new" money to the schools. According to Mark Kelly commenting in ARLnow, this is particularly troublesome:

And it’s not just the County budget that has a slush fund. The schools did not spend $13.6 million of their budget either, but they are still being given $4.5 million of the surplus revenue as well as an additional $6 million appropriations. Added together, school officials have $24.2 million more to spend outside of their annual budget process. No funding gap here either.


If you’re sick and tired of the County’s irresponsible spending, then elect another Independent to the Board. As a fiscal hawk, you can be sure that I will join John Vihstadt in urging the County to revamp the way it allocates surplus funds. I will also lobby for no more tax rate increases.


As an Independent candidate and long-time civic activist–with a Ph.D. in Political Science and service as a Congressional Fellow, I am qualified to fill that role.

Arlington currently has one Independent on County Board, who is well respected among County residents. Let’s make it two!!!

To find out more about my campaign, visit my website. Better still you can make a difference by donating to my campaign, or volunteering to help me on Election Day.

Together we can make the "Arlington Way" more than an empty phrase.

PRESS RELEASE: Tax Gouging In Clarendon

September 5, 2017

I’m an Independent candidate in the race for an open seat on County Board in November, and I seek your endorsement.

If elected I hope to stop the exodus from Arlington of small businesses that have been hard hit by a byzantine permitting process on the one hand and draconian tax increases on the other.

In fact, in 2016 ARLNow reported the closure of no less than six Clarendon eating/drinking establishments: including American Tap Room, Boulevard Woodgrill, Brixx Pizza, Fuego Cocina y Tequileria, Hard Times Cafe, and Park Lane Tavern. The Irish Pub closed in 2015 and Sehkraft Brewing followed in 2017.

Increased taxes are undoubtedly factor in these closures. Of the failed businesses ARLNow reported, the Arlington property search database reports tax assessments for six of the properties housing them during the nine years between 2008 and 2017.

During this period, the average annual tax assessment increase for the Clarendon properties was 13 percent. The overall average nine year increase in taxes was 194 percent. It’s likely that the landlords of these properties passed their tax increases onto their commercial tenants in the form of rent increases. Compare these numbers with the Consumer Price Index, which reports an average annual increase of 1.85% and and a nine year increase of 14.5 percent, and a picture emerges of flagrant tax gouging.

Consistent with that view is the fact that no less than three of these businesses, American Tap Room, Hard Times Cafe and Irish Pub, are chains that continue to operate similar establishments outside the county. In other words, these businesses did not fail on their own.

If elected to County Board, I’m going to ask the County Auditor to issue a formal inquiry to the Department of Real Estate Assessments to determine why assessments on restaurant establishments have increased so dramatically in the past ten years. I’m also going to ask the Board to seek testimony from those restaurant owners, so it can hear what they have to say about the reasons they closed or left.

If elected, I also pledge to:

  • Seek ongoing tax relief for residents and businesses and stop the exodus of federal agencies from Arlington.
  • Preserve green space and emphasize basic services like: streets, schools, libraries and public safety.
  • Promote transparency by requiring publication of official documents at least 72 hours before board and commission meetings.
  • Provide a voice on County Board for all taxpayers.

As a 13-year Westover resident and long-time civic activist–with a Ph.D. in political science and service as a Congressional Fellow–I have both the experience and independence to promote these reforms.

Arlington currently has one Independent on County Board, who is well respected among County residents. Let’s make it two!!!

To find out more about my campaign, visit my website. Better still you can make a difference by endorsing my candidacy.

Together we can make the "Arlington Way" more than an empty phrase.

PRESS RELEASE: Tax Hike on the Way, Despite Huge County Surplus

A  hefty tax rate increase is in store for Arlington County residents and businesses, but Independent County Board Candidate Audrey Clement says a tax increase isn’t needed–not until the County spends down its surplus.

April 4, 2017, Arlington, VA.

County Manager Mark Schwartz is asking for a 2 cent tax hike that will increase average residential 2017 real estate taxes by 4 percent or about $300. Yet the latest Consumer Price Index indicates that the annual rate of inflation is only 2.7 percent.

Mark Schwartz argues that increasing school enrollment and declining Metro ridership require taxpayers to step up to the plate. While both schools and Metro are major priorities, these operations should not be balanced on the backs of Arlington taxpayers.

According to the Arlington Civic Federation’s Revenues & Expenditures (R&E) Committee, rising real estate assessments will push the average 2017 tax bill up 2 percent even without a tax rate increase, and taxes have gone up 16.8 percent in the past four years.

Aside from the issue of fairness, there’s a question of need. The R&E Committee reviewed the County’s 2016 Consolidated Annual Financial Report (CAFR), Exhibit 3 and determined that “there is a $114 million surplus of unspent funds-beyond what the County Board budgeted in FY 2016-that could be reallocated.” These funds could easily cover the Metro and APS shortfalls, which the County Manager’s FY 18 budget presentation puts at $5.9 million and $11.1 respectively.

According to civic leader Suzanne Sundburg, County surplus funds do not include Arlington Public School (APS)’s unallocated surplus of $19 million, reported in the Superintendent’s FY18 proposed budget (book 128-29, web 136-37).

Clearly County and School Board accounts are bloated with excess unspent funds that could reallocated to meet current needs.

If elected, you can be sure that I will seek seek a full accounting of the County’s surplus funds. I will use the excess to cover budgetary shortfalls instead of gouging the taxpayers.

To that end, I support an R&E Committee resolution calling on the County Board to reject the County Manager’s proposed tax rate increase and maintain the current tax rate of $.991 per $100 of assessed value.

In addition, I plan to:

  • Seek ongoing tax relief for residents and businesses and stop the exodus of federal agencies from Arlington.
  • Preserve green space and emphasize basic services like: streets, schools, libraries and public safety.
  • Promote transparency by requiring publication of official documents at least 72 hours before board and commission meetings.
  • Provide a voice on County Board for all taxpayers.

As a 13-year Westover resident and long-time civic activist–with a Ph.D. in political science and service as a Congressional Fellow–I have both the experience and independence to promote these reforms.

To find out more about my campaign, visit

www.AudreyClement.com

You can make a difference! Boost my campaign for Arlington County Board by volunteering for or donating to my campaign.

Together we can make the “Arlington Way” more than an empty phrase.

PRESS RELEASE: Vote Clement to Cure Election Stress Disorder

Millions of people are turned off by this year’s presidential election. In fact so unhappy is the public with the major party presidential candidates that psychologists have come up with a new diagnosis–Election Stress Disorder (ESD)–characterized by anxiety over the prospect of electing either one of them!

If you’re an Arlington resident suffering from ESD, a cure is in sight. No. I’m not running for President. But as an Independent candidate for Arlington County Board, I offer local voters a change from business as usual to real reform. Never have Arlington residents been more in need of this remedy.

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Support a 1 Cent Tax Rate Cut

I support the recommendation of the Arlington County Civic Federation Revenues and Expenditures Committee to reduce the County’s FY 2017 real estate tax rate by 1 cent from 99.6 cents to 98.6 cents per $100 of assessed value.

Among the facts laid out in R&E’s resolution, are the following:

  • Arlington homeowners have seen a 5-year total increase of over $1,000 per year in additional taxes and fees.
  • Arlington County ranks 3rd in median property taxes out of 134 Virginia counties;
  • To realize the same amount of real estate tax revenue as last year, the County would have to cut taxes by 2 cents instead of the 1 cent tax reduction that R&E proposes.

In addition, the regional comparison in the Revenues section of the Budget Book shows that Arlington has the highest tax and fee burden of any county in Northern Virginia except the City of Falls Church. (Book 116, Web 124).

While R&E is seeking tax relief on behalf of residential taxpayers, the effect of a tax rate reduction would fall equally on commercial taxpayers, because commercial enterprises still comprise almost half the real estate tax base.

The County Manager touts the reduction in the commercial vacancy rate by 1.6 percent in the past year, with a concomitant increase in real estate revenue of $5.4 million.

To accomplish this Arlington Economic Development (AED) hired 4 additional staff for its Business Investment Group (BIG) to retain and recruit new commercial tenants at a cost of about $500,000. The Budget Book reports the retention or addition of 5,000 jobs in 2015 half of which were attributable to the retention of one large employer, Corporate Executive Board (web 673).

But at more the 20 percent the commercial vacancy rate is still double the historic average. To attract more commercial tenants, the County Manager proposes $1.5 million in one-time grants for small startup companies. But that is just a drop in the bucket compared to what neighboring jurisdictions are spending.

For example, the County Manager’s Message to the County indicates that PG County has a $50 million incentive fund that awards $7-$11 million per year to small and medium businesses. DC awards $1 million modernization grants along with a tax rebate program that provides up to $5 million in total incentives per eligible business (Book 26, Web 34).

The only way Arlington can compete with those giveaways is to reduce the tax rate to keep its commercial tax base.

Arlington Needs Commercial Tax Relief

The County Manager’s proposed budget indicates that commercial real estate tax assessments dropped by $537 million in 2014 or 2.6% from the previous year. This is the first significant drop in commercial real estate assessments since the BRAC closures in 2011-12 and reflects the 23% office vacancy rate reported by the Washington Post in September, 2014.

Clearly the County must consider business tax relief or otherwise face the likely exodus of more commercial tenants like NSF and Fish and Wildlife Service. One candidate for elimination is the 12.5 percent commercial real estate surcharge tax, the proceeds of which go to the Transportation Capital Fund for projects like new ART buses and the scuttled Columbia Pike trolley.
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