Fairfax County Faces Large Deficit, Severe Budget Constraints in Fiscal 2010
By Sharon Cavileer
If Fairfax County government continued to spend at its current rate, the FY 2010 budget, which will go into effect in July, would reflect a $430,000,000 shortfall. That’s more than $390 for every man, woman and child living in the county. That’s over and above what each person is already paying in taxes.
Some of the county’s revenue loss comes from the belt-tightening exercised by its residents. When they put off buying a new car, the county loses both the sales tax revenue and the higher rate for a new car paid in personal property tax. When they stop shopping for clothes, sales tax revenue declines. When they stop going out to dinner, meals tax revenue falls. When they drive less, gas and Metro tax revenues fall. Couple the spending suspension with the fallout from the subprime real estate crisis, the sluggish U.S. economy and the fall of the dollar on world markets with other factors to create a perfect storm of economic woes for Fairfax County and other Northern Virginia jurisdictions.
Supervisor Sharon Bulova, chair of the Budget Committee, said, “We’re not alone in this. All the jurisdictions in Northern Virginia and other localities throughout the state are in the same boat. Downturns in the economy are cyclical. During the 1980s and 1990s, real estate values remained flat. In 2000, they started to rise with a vengeance. People started using their house as a financial instrument, not a home. And lending practices were put in place that presumed the rise would never end. Foreclosures are also having a negative effect on property values in the area.”
While revenue is declining, operational expenses are increasing for Fairfax County for fuel, utilities, federal and state mandates and the education of its children. For the 2008n2009 school year, Fairfax County enrolled 5,000 more students than it was expecting. The nationally ranked system with an enrollment of approximately 166,000 students draws 53 percent of the county’s revenues, leaving the county with approximately 3.3 billion for operation of all other services.
An example of the rising costs faced by the county is fuel. According to Susan Datta, director of the Department of Management and Budget, the county spent 14.6 million for fuel in 2005 and 29 million in 2008. Fairfax County is projecting a fuel cost of 40.8 million for 2010.
Due to its rapid growth and prosperity during the last 40 years, Fairfax County has expanded services to its citizens including investing in nationally ranked schools, parks, open space and facilities. Considered among the most prosperous jurisdictions in the United States, Fairfax County maintains an AAA bond rating and has been named among the top-managed jurisdictions in the U.S. by Governing magazine.
Virginia law requires its counties to maintain a balanced budget, so deficit spending is not an option. To alleviate the budget crisis, the county Board of Supervisors began meeting on Sept. 15. to address the budget. Each department head has been charged to identify a 15 percent cost reduction for the 2010 budget. This will provide guidance for the Board’s decision-making process.
The Board of Supervisors approved a tax increase for 2009 increasing the rate of real estate taxes from .89 to .92 per $100 of assessed value. For the 2010 budget, the county is projecting an additional 10 percent decline in housing values adding to the potential shortfall. Staffing has been evaluated already and in many cases, positions remain unfilled and current employees are providing the same levels of service, basically reducing costs.
“All of the economic factors have put us in a situation where we have less to spend than in previous years,” said Supervisor Sharon Bulova. “We’re doing the responsible thing and looking at what was successful in the 1990s and looking at things we can do much more efficiently. And we’re involving the community in a much more meaningful way to hear what services are important to them. We’re way in advance of the budget being advertised in February.”
County citizens are being asked to participate in a series of 20 public dialogues with county and school leaders to hear ideas from the county’s residents on what services are critical, important or just nice to have. The public dialogues will be held through Nov. 13, 2008, at a number of locations (www.fairfaxcounty.gov). Cost-cutting ideas may be submitted online, as well.
“Due to the magnitude of the challenge, we need to find solutions that are sustainable,” said Datta. “We need to find long-term strategies for adjusting our service inventory. Our residents have always been involved in the process but will be much more involved in meeting this challenge.
“I am confident,” said Datta, “that we have the talent and the resources to find sustainable strategies to manage our way out of this.”
Bulova agrees. “Everything is on the table with a positive eye for opportunities for savings and to support economic development and assure that we’re a welcoming community for business growth. Economic downturns are times when you can step back and look for efficiencies. We want to reduce spending without sacrificing the quality that people value in Fairfax County.”
During this election year, the budget challenge has become a political hot-button. Families caught in their own budget crises are ill-prepared to face additional tax increases. The chairman of the Board of Supervisors, Gerald E. Connolly (D), running for Congress for the 11th District, commented that balancing the 2010 budget is “a huge undertaking.” His opponent in the Congressional race, Keith Fimian (R), said, “The economy is down, Wall Street is in a tailspin, Fairfax County is $430 million in the red. Now is not the time to punish families with higher taxes—taxes that would cripple the economies of Fairfax and Prince William counties when they can least afford it.” School board members irritated the public by announcing they would purchase an administrative building while many children attend classes in trailers.
Now, everyone in Fairfax County will have a chance to weigh in on the debate. Public dialogues begin on Oct. 14 (see box.) Go to www.fairfaxcounty.gov/government/budget to register for one at the most convenient location.
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