Fairfax County Executive Bryan Hill is pitching major revisions to his budget proposal for fiscal year 2021 in response to the COVID-19 pandemic.
The revised budget, which was released yesterday evening, eliminates a proposed three-cent tax rate increase and fee increases across-the-board in order to relieve pressure on the county’s taxpayers. Hill’s proposal also shifts spending to essential services only and removes all salary increases.
No net increase in the county’s revenues is expected.
The proposal maintains funding increases for the county’s health department the school’s health programs, as well as coordination for programs for those with developmental disabilities, and IT infrastructure for the November elections.
Roughly $9.6 million will be set aside in reserve funds to address the pandemic, in addition to eight new positions in the health department to address the county’s response.
“Protecting the jobs and current pay levels of the county’s existing employees continues to be of utmost importance as we progress through these challenging times,” Hill wrote in a letter to the Fairfax County Board of Supervisors.
Hill cautioned that uncertainty about the extent of the economic downtown complicates the budget process.
“At this time, we are unsure how long the current economic downturn will last as we do not yet know how long it will take for our country to begin to control the spread of the COVID-19 virus.”
The county expects next year’s general fund revenues will rest at the 2020 level of $4.5 billion. This estimate assumes that the health crisis is over by July and that gradual recovery prompts the resumption of economic activity, according to the county.
Major hits to revenue streams like the sales tax, transit occupancy tax, and business occupancy tax are also expected. These losses are expected to offset an expected real estate tax revenue increase of 3.7 percent or $107.4 million. Hill said it was unlikely the state would be able to absorb the impact of revenue losses without adjusting allocations to local jurisdictions.
Here’s how revenue streams could be impacted:
- Personal property tax: Decrease of $9.5 million or 1.5 percent
- Sales tax: Decrease of $26.7 million or 13.5 percent
- Transient occupancy tax: Decrease of $7 million or 30 percent
- Business, professional and occupational licenses: Decrease of $17.2 million or 10 percent
- Land development services building and inspection fees: Decrease of $4.2 million or 10 percent
- Interest on investments: Decrease of $36.7 million or 62.6 percent
Fairfax County Public Schools will receive 0.3 percent more than last year’s budget, a fraction of the previously proposed 3.65 percent increase.
Residents can provide testimony on the budget via video, phone or online for upcoming budget hearings, which are rescheduled to April 28-30. The county board is expected to adopt the budget on May 12, after a mark-up meeting on May 5.
“As Fairfax County finds itself in a different reality, we will need to think about changes that may be necessary to maintain our premier status. Our future may be leaner, and will certainly be more efficient, as we use different tools to provide the services that are needed for our community,” Hill said.