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Revenue Sharing Agreement Revisited

Tuesday evening, June 2, the venue for the latest round in the effort to return accountability to the Arlington School Board was the monthly meeting of the Arlington County Civic Federation. At its May 2009 meeting, a resolution was presented during 'new business' calling for the County and School Boards to look at ways to improve the current Revenue Sharing Agreement (RSA).

To that end, the Revenues & Expenditures and Schools committees of the Civic Federation revised the resolution, and on Tuesday presented delegates an opportunity to urge the two Boards to take another look at the RSA. According to the committees' joint report (requires Adobe):

“Prior to the FY2002 budget process, the School Board would prepare its annual budget   request, including a proposed amount for the transfer payment to the Schools from the County General Fund budget. This transfer payment is the primary (but not the only) source of revenue in the Schools budget.

“The County Board would then consider the School Board’s transfer payment request, along with the budget proposal from the County Manager, and finalize the County Budget for each year, setting various tax rates and setting the amount of the transfer payment to the Schools.”

The impetus for the RSA was that the Schools were taking an increasing share of taxpayer dollars. For example, in fiscal year 1985, 33.7% of the general fund was devoted to K-12 education. That percentage climbed to 38.1% in FY2000 and was 36.8% in FY2008. (Those percentages are from the county’s audited financial statements).

The percentage alloted to the Schools in the original RSA was 48.6%, but has seen minor revisions. The percentages in the paragraph above is much lower than the School share in the RSA since the RSA primarily divides “Arlington taxes” while the general fund includes revenue from the federal and state government as well as such things as fees, fines, and miscellaneous revenues. Of particular note in the joint committee report is the following, suggesting the increasingly dysfunctional nature of the RSA:

"For the FY2010 budget, the County Board, citing enabling language in the RSA, excluded the incremental revenue from the 2.7 cent increase in the real estate tax rate for CY2009 from the RSA, retaining all of this revenue within the County budget."

According to the Arlington Sun Gazette:

“On a 17-16 vote, delegates overruled the recommendation of the organization’s schools and revenues-expenditures committee, which had agreed the revenue-share proposal needed to be taken a look at.

“Arlington is one of about 15 percent of jurisdictions across Virginia that have in place some kind of formula for funneling local tax dollars directly to schools. In the other localities, schools vie with other interests - from road-building to public safety to social services - for public tax dollars each year.

“Arlington put the revenue-sharing agreement in place in fiscal 2002, hoping to reduce what had been political conflicts between the elected School Board and elected County Board. Under the agreement, 48.6 percent of general tax revenue went directly for school operations, a figure that has since risen to 49.1 percent.” 

The Sun Gazette’s Scott McCaffrey also reported:

“some of the wording in the resolution irked enough delegates to sink the proposal.
“Peter Owen, a member of the Civic Federation’s executive committee, said the proposal was offered only “very vague and generalized criticism that doesn’t bring a lot to the table.” Incoming Civic Federation vice president Mark Antell voiced concern that scrapping the agreement “leads us back to the fighting between the School Board and County Board.”
“There are those who believe that’s what governing and budgeting is supposed to be about,” said Wayne Kubicki, who chairs the federation’s revenues and expenditures committee.
“While some who voted against the proposal had voiced concern that the school system might lose funding if the revenue-sharing agreement disappears, Kubicki predicted that keeping the plan in place is what could harm schools.”

Full disclosure: Mr. Kubicki is an ACTA delegate to the Civic Federation.

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