New Fairfax County Budget Proposal Reflects Impact Of Coronavirus

FAIRFAX COUNTY, VA — The Revised Fiscal Year 2021 Budget Proposal Fairfax County Executive Bryan Hill submitted to the Board of Supervisors Tuesday reflects the new revenue realities caused by the coronavirus pandemic. Gone is the 3-cent increase to the Real Estate Tax rate, which would've raised the average household tax bill by $346 next year.

"This revised proposal maintains the current Real Estate Tax rate of $1.15 per $100 of assessed value and eliminates the proposed three-cent increase — including the two cents that was proposed to balance the General Fund and the one cent for affordable housing," Hill said, in a letter to the Board accompanying the revised budget proposal.

Initially, the penny toward affordable housing was going to help pay for three new positions for the Department of Housing and Community Development. In his revised budget, Hill has redirected an existing position and deferred adding new positions instead.

Hill also eliminated his proposal to add a 4 percent Admissions Tax on the sale of movie, theater and concert tickets. Revenue from the Admission Tax would have been added to the county's Contributing Fund and used to support arts, cultural activities, and tourism.

"All proposed tax rate and fee increases have been eliminated to alleviate pressure on the County’s taxpayers," Hill said. "Pending adjustments have been refocused on essential services only, which includes the elimination of compensation increases."

Following Virginia Gov. Ralph Northam's stay-at-home order at the end of March, many businesses affected by the Admission Tax have closed their doors because they were not deemed as providing essential services.

"As many of the facilities that would have been impacted by the tax have been closed – such as movie theaters and concert venues – now is not the appropriate time for us to consider this tax," Hill said. "It is a time to reconsider how we provide services into the future."

In addition, Hill has slashed the number of new positions he was asking for from 177 to 20, with one of those remaining positions going to help the Fairfax County Health Department in its fight with the new coronavirus, also known as COVID-19. Ten of the new positions would be Nurse and School Health Aide positions, which support Fairfax County Public Schools.

The Revised FY 2021 Budget Proposal eliminates all pay adjustments for county employees.

"This includes adjustments resulting from market studies as well as the changes proposed to state salary supplements," Hill said. "Adjustments included in this category are related to savings available as a result of decreased requirements for retiree health liabilities and health insurance premiums. It should be noted that, with no anticipated Market Rate Adjustment, the County’s living wage will remain at the current rate of $15.14 per hour."

Employee benefits will also be decreased by $5.63 million, due to projected savings in health insurance premiums.

In his original proposal, Hill projected total county revenues of $159.14 million, which included a 3.65 percent increase over FY 2020 to support Fairfax County Public Schools and other county expenditures.

In his letter to the Board, Hill acknowledged that it was difficult to project revenues due to the impact COVID-19 has had on the economy. Therefore, he was recommending that General Fund revenues remain flat compared to the FY 2020 Adopted Budget Plan.

"I have maintained equal growth for the County and Schools in this proposal, as I had in the advertised plan," he said. "However, this growth has been drastically reduced from 3.65 percent to 0.32 percent over the FY 2020 Adopted Budget Plan."

Under the revised proposal, the increase in the transfer to the Schools Operating Fund is now $7.31 million rather than the original $85.52 million. This is a 0.34 percent increase in funding for FCPS over what it received in FY 2020. FCPS will receive $7.51 under the new proposal, which accounts for 52.7 percent of the General Fund disbursements.

"In the absence of solid data and with so much uncertainty about the outlook, General Fund revenues are projected to be $4,457,199,539, which represents no change from the FY 2020 Adopted Budget Plan level," Hill said. "This level of revenue is based on the assumption that by July the health crisis is over and gradual recovery in consumer confidence leads to the resumption of economic activity."

The public will have an opportunity to present feedback on the budget at upcoming hearings in each of the supervisory districts. Here is the timeline for the FY 2021 Budget process:

• April 14: Board of Supervisors holds public hearing on FY 2021 effective tax rate
• April 28-30: Board of Supervisors holds public hearings on FY 2021 Budget, FY 2020 Third Quarter Review, and FY 2021-FY 2025 Capital Improvement Program
• May 5: Board of Supervisors marks up FY 2021 Budget and adopts FY 2020 Third Quarter Review
• May 12: Board of Supervisors adopts FY 2021 Budget, tax rate and budget transfer amount to FCPS
• May 21: School Board adopts FCPS FY 2021 Approved Budget
• July 1: FY 2021 begins
• July 28: FY 2020 Carryover Review submitted to Board of Supervisors for advertisement
• September 29: FY 2020 Carryover Review approved by the Board of Supervisors
• Fall 2020: Potential additional quarterly review submitted/approved (potential)

Related:

Real Estate Tax Hike, Admission Tax In Fairfax's Proposed Budget