Bleak funding outlook presented at Budget Town Hall
Fairfax County’s financial situation remains stagnant, as cost pressures rise, revenue isn’t expected to increase much, and there aren’t any new funding sources available. That’s the bleak picture of the FY 2018 advertised budget presented by County Executive Ed Long at a Town Hall hosted by Mason Supervisor Penny Gross March 9.
The county’s needs are greater than the available resources, Long said, so the $4.1 billion budget doesn’t include enough funding for things the Board of Supervisors would like to support, such as cost-of-living pay raises for employees and increased funding for public safety and Metro.
Revenue – The advertised budget maintains the current tax rate of $1.13 per $100 of assessed value. The rate was raised 4 cents last year. According to Long, the average homeowner’s tax bill will go up $40 due to rising home values.
The majority of county revenue, nearly 65 percent, comes from real estate taxes. The county doesn’t have the authority to impose other taxes. A meals tax, which was rejected by voters in November, “could have been a great way to diversify the revenue stream,” Long said.
School funding – The budget calls for an increase of $50.95 million transferred to Fairfax County Public Schools, for a total of $2.17 billion. That’s an increase of 2.7 percent over the current year, but well below the nearly $61 million increase requested by the school board.
State education funding has been decreasing, putting more of a burden on localities. Because of the state funding formula, wealthy counties like Fairfax get much less funding than most other counties. Fairfax County provides 72 percent of the FCPS budget, while the state average is just 41 percent.
Employee pay – By not including a market rate adjustment in the pay scale, the county saves about $20 million. “There’s a concern that we remain competitive,” Long said, noting there’s a risk that employees will transfer to other jurisdictions that pay more.
Public safety – The budget includes funding for 26 new police officers, well below the number recommended by a consultant study. According to Long, increased staffing is needed to deal with complex police incidents, including situations involving people with mental disabilities.
Some, but not all of the recommendations by the Ad Hoc Police Practices Review Commission will be implemented. A pilot program on body cameras will be implemented in a couple of police districts, but there aren’t enough funds to equip all officers with body cameras.
Human Services – The budget includes funding for 12 new case management positions to support individuals with developmental disabilities and one new specialist in human trafficking policy and prevention.
The budget for the current year includes $1.5 million to assist FCPS graduates with intellectual disabilities up to age 22. Under new regulations, that support would have to be expanded to cover developmental disabilities like autism, which could cost as much as $6.7 million. “That is not sustainable,” Long said.
Real estate – The county’s high office vacancy rate, 16.5 percent, is not expected to change. Long blames the cutback in professional jobs. Job growth in Fairfax County is mostly in retail and healthcare, which don’t need office space.
Much of the vacant office space is in obsolete buildings 20 years old or older. There is strong demand for new offices in Tysons and Reston, however.
The local real estate market is underperforming the nation, and Fairfax County is underperforming the region, Long said.
Metro – The budget does not call for an increase in the county’s contribution to Metro. The Washington Area Metropolitan Transit Authority is requesting significant increases in county contributions, which are not sustainable within existing revenue resources. “The system has been neglected for so long, it can’t be fixed overnight,” Long said.
“This has to be a regional effort,” he said, and the federal government should contribute more. Without additional funding to keep Metro safe and reliable, there are likely to be more cutbacks in service hours.
The future – The new federal administration creates uncertainty for local and state governments. Changes in tax policy, the federal hiring freeze, increased immigration enforcement, and other policies will have an impact in Fairfax County.
If Congress repeals the Affordable Care Act and fewer people are able to afford health insurance, that could raise costs for local clinics. Increased spending for defense and tax cuts for the wealthy could mean cutbacks in housing, education, environmental protection, and other federal programs.
Fiscal year 2019 will be even more challenging, Long said, with revenue growth likely to be modest at best. One bit of good news: Phase 2 of Metro’s Silver line will open in 2020, leading to more commercial growth around Metro stations.
However, Long said, “We certainly do not see a boom in the local economy any time soon.”
Next steps – The Board of Supervisors will hold public hearings on the budget April 4-6. The budget mark-up is scheduled for April 25, and the board will adopt a budget for FY 2018 on May 2.
13 responses to “Bleak funding outlook presented at Budget Town Hall”
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"The local real estate market is underperforming the nation, and Fairfax County is underperforming the region, Long said."
Interesting, contrary to what I'd been thinking. I'd like to see the data for that.
Perhaps since it was already strong? I'd like to know what he means by that as well, but it sounds like a cop out to me. Suburban office vacancy rates are high across the nation; that issue is not unique to Fairfax County
Slide 15 of the budget presentation has the data points referenced by the county [1]. For real estate, they are using the Case-Schiller Index.
If you look at the 52 largest markets, the DC market has the 12th highest office vacancy rate. National vacancy rates hit their lowest level since 2008 [3], while the Fairfax County office vacancy rate is at its highest level since 1991.
[1] http://www.fairfaxcounty.gov/dmb/fy2018/advertised/fy2018-advertised-cex-budget-presentation.pdf
[2] http://www.us.jll.com/united-states/en-us/research/office-outlook
[3] http://www.cbre.com/about/media-center/q2-2016-vacancy-office
Welp, I'm afraid this is an ongoing trend that the BOS is going to have to contend with. Companies would rather be in urban locales rather than suburban office parks. I don't have illusions that tax incentives and other incentives could buck this trend, either; I'd suggest that the county shift away from massive school funding increases and go toward massive spending increases in transportation, encouraging development, and anything else related to urbanization.
Dirty little secret. Illegal immigrants utilize more services than they pay for. We have reached the tipping point. One party rule has only one solution…keep taxing the middle class to pay for it.
The problem with Socialism is that you eventually run out of other people's money.
-Margaret Thatcher
Bingo! Fairfax County loves social engineering and bankrupting the County.
Again it is all about economics: the County is overwhelmed by services demanded by illegals such as schools, public safety and a host of other services thar are under strain. The quality of life for tax paying residents has declined while taxes go up. The county is struggling to unsuccessfully lure tax paying businesses and residents to move into some of its older districts while its middle class base and millennium professionals flees from areas like Mason District. As much as I dislike Trump, the County needs a similiar shake up. The 1970's style of democratic leadership is outdated and its destroying Fairfax County.
This is a multi-headed monster that will require taming and that is not going to happen as long we keep electing the same outdated leadership that can only dip into their outdated modes of non-solutions that are breaking the spine of the County and its constituents.
Oh come now, it isn't just illegals. Lower income immigrants of all statuses flock to Fairfax County.
Absolutely absurd that we are a piggy bank donor county to the rest of the failing red counties in VA when we really cannot afford to be. They need to start raising their own real property tax rates and meals taxes, and we need to keep more of our money here.
Well Arlington figured it out, it the bozos running Fairfax that are clueless.
I hope that the BOS' attitude about running up taxes has finally changed as he result of the defeated meals tax referendum. For years, the supervisors having been bending to the demands of various interest groups. This has resulted in a steady stream of property tax hikes notwithstanding the generally poor state of the economy. However, after these same interest groups failed to deliver a victory for the meals tax, it became clear that the majority of voters feel comfortable with the current level of services. Most of these presumably don't participate in pressure groups, so the referendum represented their best opportunity to make their voices heard. When it comes to government services, no one ever gets everything they want. Although the proposed $50 MM increase in school spending won't satisfy the school funding lobby, it is nevertheless an impressive increase in these times. So, I hope the BOS takes its cue from the results of the meals tax referendum and finally stops giving in to the pressure tactics of the various special interests.
How can one of the riches counties in the country have such a bleak outlook? Why have we continued to elect the same people who keep running what was once a vibrant county in the ground? Why are our elected officials not admitting why people have flocked to Loudoun County despite the longer commute?
Unfortunately, a lot of people who have already commented, have pointed to some very real causes that no one wants to admit to. The fact of the matter is that the county cannot possibly sustain its services, when multiple families are living in a single apartment or house. If the county would enforce the codes on the books which prevent overcrowding, more property tax revenue would be generated. It is time that we demand more of our elected officials.