Fairfax County expects huge revenue losses due to coronavirus

The Budget Committee meeting on March 31. Board members Penny Gross (Mason) and Dalia Palchik (Providence) participated remotely.

The advertised budget for FY 2021 presented to the Fairfax County Board of Supervisors in February is outdated due to a decline in revenue and increased expenses projected for dealing with the coronavirus crisis.

A revised draft budget will be released April 7.

At a meeting of the board’s Budget Committee March 31, Christina Jackson, the director of the Department of Management and Budget, outlined the impacts of coronavirus on the budget, although some of these numbers are based on extrapolation, rather than data:

• The Federal Reserve’s action to lower interest rates to 0 percent on March 15 will result in approximately $25 million in lost revenue to Fairfax County. 
• The previous budget predicted sales taxes would generate $200 million for 2021. Each 25 percent reduction in sale taxes over a three-month period would result in a loss of about $13 million. Total losses will depend on how long the crisis lasts. 
• The transient occupancy tax had been estimated to generate $24 million. For April, occupancy is expected to be less than 20 percent, rather than the 70 to 80 percent predicted earlier. A 75 percent reduction over a three-month period would result in a revenue loss of $4.5 million. 
• The business, professional and occupational license tax had been estimated to bring in $147.7 million. Each 5 percent reduction would result in a revenue loss of $8.6 million. 
• Personal property tax revenue is fairly insulated and had been estimated to generate $636.4 million. This will decline, too, as fewer people will buy new cars and business personal property tax receipts will decline. Each 2 percent reduction in personal property tax would result in a revenue loss of $12.7 million.
• If SACC (School Age Child Care) stays closed all summer, the county would lose over $6 million.
• A 10 percent drop in building inspection fees would result in a loss of $4.2 million. 

Public hearings on the budget are scheduled for April 14-16. The public is encouraged to submit written or video testimony and only appear in person if absolutely necessary.

During the Budget Committee meeting, the board also discussed plans for using $11.3 million in funds from the current budget to help individuals with emergency needs, help small businesses stay afloat, and otherwise respond to the coronavirus crisis.

A proposed $1 million microloan program, outlined by Rebecca Mondry, director of the Department of Economic Initiatives, would provide six-year loans of up to $30,000 to help businesses with 50 or fewer employees that demonstrate financial hardship.

There would be no principal or accrued interest for six months. The interest rate would be 3.75 percent, pegged to the Small Business Administration’s Disaster Relief Loan Fund.