Fairfax County Officials Brace for Revenue Losses, Explore Lifelines for Businesses

Updated 4/1/2020 — Corrects information about a proposed $1 million fund to help small businesses.

As the coronavirus outbreak continues to take a major hit on the economy, Fairfax County leaders are bracing for the impact of the outbreak on the upcoming county budget.

At a budget meeting today (Tuesday), county leaders said they plan to revisit the proposed fiscal year 2021 budget, which was developed before the coronavirus pandemic impacted the area. A revised proposal is expected to go before the Fairfax County Board of Supervisors by April 7.

The county is expected to take a hit from losses in the following categories: sales tax, transit occupancy tax, business permits, and licensing tax, personal property tax, and state revenue, among other categories. Over three months, a 25 percent dip in the local sales tax results in roughly $12.7 million in losses.

All agencies are tightening their belts and limited spending for critical needs only.

This year, county officials hope to set aside $11.3 million to offer help to nonprofit organizations, local businesses, manage the COVID-19 crisis, and fund licensing for the shift to teleworking.

As of today, there are 245 confirmed cases of COVID-19 in the Fairfax Health District, which includes Fairfax County, the cities of Fairfax and Falls Church and towns in the county — leading all other jurisdictions in the state.

Support for Businesses and Nonprofits

In addition to federal assistance, a proposed $1 million fund to be administered through the Community Business Partnership could help small businesses struggling financially and at-risk of closing.

The microloan program, if approved, would allow small businesses to apply for a maximum of $30,000 with an interest rate of 3.75 percent. To qualify for funds, businesses must have fewer than 50 employees, demonstrate financial hardship linked to COVID-19 and be based in the county.

Lee District Supervisor Rodney Lusk said that he wants to see the county diversify its commercial tax base.

“It’s imperative today as we look at the impact on small businesses,” he said at the meeting today.

Local nonprofit organizations are struggling to raise money and need help with services and support, according to Chris Leonard, the director of the county’s Department of Neighborhood and Community Services.

More individuals are calling the department for help with unemployment, low income and financial strife.

A recent survey of local nonprofit organizations found that most organizations are seeing more requests for food, health, hygiene and financial assistance, Leonard said. Youth programming and transportation are most likely to see major reductions.

He hopes to create a program to offer financial assistance and food for individuals most in need, targeted especially for local residents making 200 percent of the area median income. Support would be provided through the county’s existing network of community-based organizations.

County officials noted that the initiatives, programs and funding will shift as the COVID-19 outbreak continues to unfold.

“We’re going to have to evolve this as we go,” Lennard said.

Next Steps For the Budget 

Once the revised budget is ready by April 7, residents can expect opportunities to testify April 14-16.

Joseph Mondoro, the county’s chief financial officer, said that the meeting today that people will be able to testify via video, phone, online forms and even in-person. Although Chairman Jeff McKay said that he would like people to only come in-person as a last resort.

McKay added that quarterly reviews, which the county already does, will will be “much more robust” for the FY 2021 budget.

Much of the discussion between the supervisors today involved ideas they had for where to cut or boost up the new budget, including suggestions from Mason District Supervisor Penny Gross to “keep first responders in mind” and Springfield District Supervisor Pat Herrity to delay funding the body camera program for the police department.

At the end of the meeting, McKay said there will be “shared pain” in the new budget, noting that cuts should not focus on one area.

McKay said that one of his top priorities is to keep on the county’s employees.

“We want to protect our employees,” he said.

Catherine Douglas Moran contributed to this report

Photo via Fairfax County Government