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Commercial Assessments a Budget Buster?

Scott McCaffrey reported a story this morning at the online Arlington Sun Gazette, beginning the article by writing:

“(Arlington) County government officials are staring at the potential of a $67.5 million budget gap over the next 18 months, based on preliminary estimates of real estate reassessment notices that will be sent to taxpayers next January.

“County Manager Ron Carlee on Sept. 11 painted a bleak picture in a memo to members of county advisory panels and the Arlington County Civic Federation, saying he expects residential real estate assessments to fall from 3 to 7 percent from 2009 figures, and, more dire, that the assessed value of commercial property could drop from 8 to 17 percent.” (emphasis added)

“Combined, this is an overall decline between 5.3 percent and 11.6 percent, with a ‘probable’ scenario at negative 9.14 percent,” Carlee said.

Perhaps as a reminder of what the Arlington County Board did earlier this year, McCaffrey wrote:

"To offset the lower assessments that were announced back in January, County Board members in the spring voted to raise the real estate tax rate 2.7 cents per $100 assessed value, an increase of just over 3 percent.

"Homeowners saw average tax bills rise slightly from 2008 to 2009, a far cry from some other Northern Virginia jurisdictions - especially those with more vibrant two-party political systems than Arlington - where tax bills declined substantially for many homeowners."

McCaffrey cited comments by Arlington resident Wayne Kubicki:

“Wayne Kubicki, a former member of the county government’s Fiscal Affairs Advisory Commission and probably the most respected budget-watcher outside the government ranks, said the coming year would require serious choices by elected officials.

“Service cuts, hiring freezes and terminations will all be on the table again, and this time the schools will be affected, as well,” he said. “At minimum, I would hope we do not see an increase in the average residential tax bill, as higher tax bills on homes whose values have declined would be a real double-whammy for Arlington homeowners.”

The County Manager was very clear in his February 11, 2009 memo, saying, “Current economic indicators reflect Arlington’s sustained strength . . . however, our first set of real estate assessment scenarios reveals clearly that Arlington is not immune to the larger economy. Of particular concern is the lack of commercial credit and its impact on commercial values.”

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