Taxes Increasing at Twice the Rate of Inflation

Comments at Arlington County Tax Hearing, March 30, 2022.

The County Manager’s budget includes a residential real estate tax hike of 5.3 percent (Online Budget, p. 95, 108). This is par for the course since according to its own data, the County’s ten year average effective residential real estate tax rate has increased at double the rate of inflation.

The County argues that the tax hike is driven by rising real estate assessments, not legislated increases in the actual real estate tax rate. Therefore it’s not tax gouging.

Yet the County has done little to restrain its spending. In fact it is advertising 115 new positions this year for an additional estimated cost of $10 million—double that when administrative costs are thrown in. At 1 cent of additional taxes for each additional $7.8 million in tax revenue, the new hires will add more than 2.5 cents to the current real estate tax rate of $1.03 of assessed value.

In the face of rising assessments and the financial havoc caused by the pandemic, other nearby jurisdictions have taken the opposite tact by proposing reduced tax rates. In a February 25 newsletter, Jeffrey McKay, Chairman of the Fairfax County Board of Supervisors said:

“Again, one of my top priorities for our FY 2023 budget is to reduce the tax rate to offset the impacts these high assessments have on our residents’ financial wellbeing. . . I believe we can reduce the tax rate and still address recruitment and retention strategies for our County agencies hardest hit throughout the pandemic.”

McKay’s desire to reduce tax rates is no accident. In 2021 he took heat from the Fairfax County Taxpayers Alliance for misleading the voters about Fairfax County’s own recent real estate tax rate increases. But at least McKay got the message.

Not so the Arlington County Manager, who has justified tax increases by larding his budget with an unprecedented number of new hires, including more than $240,000 for equity, diversity and inclusion initiatives or EDI (Online Budget, p.23 [36]).

If the County were truly interested in pursuing equity, diversity and inclusion, it would do what Jeffrey McKay has promised his own constituents—lower the tax rate. It’s obvious that rising assessments disproportionately impact people of color. To pay lip service to EDI while gouging the taxpayers is worse than tokenism. It’s highway robbery.

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