The New Normal?

"The new normal?" That’s a term I’ve been hearing a lot lately about the economy and it comes with a question mark. It seems like you can ask any two economists about our financial future and get four different answers.

What exactly is the new normal and what does it mean for Fairfax County and the services that it provides? That’s the question both the Board of Supervisors and the School Board are asking as we head into preparations for the FY2011 fiscal year that will begin next July. We are looking not only at the 12 months to come, but at sustainability throughout the next several years.

When we began our budget process at this time last year, we anticipated $650 million shortfall to maintain our FY2009 level of services. We closed that shortfall through a number of means including freezing County employee salaries, cutting 306 positions, and holding budgets for most County agencies at or below the FY2009 level. We cut half the Penny for Affordable Housing, reduced overtime funding, and cut funds budgeted for fuel and take home cars. And—where we could, we raised fees in such areas as commercial parking violations and construction permits.

Our County budget reflects the economic conditions of the national and state economies. The Board met at the end of September for a fiscal outlook presentation. As with so much of the economic reports we’re getting daily, there was both good and bad news.

On the positive side, the county’s housing market seems to be closer to stabilizing—key because about 64 percent of our General Fund revenue comes from real estate property taxes. While prices are still declining, they moderated considerably during the summer months. On the worrisome side is the concern about another possible wave of residential foreclosures, along with continuing weakness in the commercial residential market. At this point, our economic experts think that it will be at least 2013 before the housing market achieves equilibrium.

Also on the positive side of the ledger, Fairfax County’s local economy is holding up well, in large part because of the growth of Federal procurement spending, as well as Federal stimulus dollars and the sales tax revenue from programs such as Cash for Clunkers.

What does this mean and how does it affect our ability to provide services to our citizens? At this point, we anticipate a $490 million shortfall that we will have to close—on top of the cuts that we made in the last County budget. I went into our budget deliberations last year believing that there are some government responsibilities that are not negotiable. Proposed cuts to critical police and fire services, including regional shopping center officers, middle school police resource officers, and the sexual predator enforcement and detection team, among others were restored. Unacceptable response times for medical emergencies were avoided with the restoration of EMS services, and many vital human services that are especially necessary during tough economic times were spared. As much as possible, we protected the school system and maintained the progress we’re making keeping our neighborhoods healthy by restoring proposed cuts to zoning enforcement, property maintenance, and the strike team.

Fairfax County will again hold a series of community budget dialogues this fall.

My budget advisory group is also reconvening and will work with me and senior County staff to find areas cost containment and consolidation.

This year will be harder.  Our citizens have high expectations for their local government, the services it provides, and the quality of those services. How we handle those and how we agree on what shared sacrifices and adjustments need to be made will resonate long after this deep recession ends. 


Also in This Issue of Supervisor McKay's Lee District Update:

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