Difficult Budget Forecasts for County and Public Schools; What Happens Next

FY 2018 budget forecast graphic with county and FCPS seal.
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Very limited growth in real estate tax revenues and the rising costs of programs and services were underscored in the budget forecasts presented on Nov. 22 by Fairfax County Executive Ed Long and Fairfax County Public Schools (FCPS) Superintendent Karen Garza.

Each November, the county and FCPS announce their budget forecasts to residents, county agencies, the business community and elected officials, which include expected tax revenues and significant funding needs for the upcoming fiscal year budget. By state law, the county must have a balanced budget.

Photo of joint meeting of Board of Supervisors and School Board.

The Board of Supervisors and School Board met at the Government Center on Nov. 22 for the budget forecast presentations.

Bottom Line Forecast for FY 2018

The county projects only $74 million in additional revenue in FY 2018 (begins July 1, 2017) to cover:

  • $90 million in county funding priorities, not including many significant items.
  • $134 million in FCPS disbursement requirements (funding needs).
County Budget Forecast

Real estate tax revenue accounts for almost 65 percent of the county’s general fund budget. Budget forecast impacts from real estate tax include:

  • Residential Real Estate: Home prices in the county are projected to increase only 0.4 percent in FY 2018. Home prices were essentially flat through October.
  • Commercial Real Estate: Commercial (nonresidential) property values are projected to only increase 1.25 percent in FY 2018. Office vacancy rates remain at historically elevated levels.

Projected revenue is not sufficient to cover the county’s debt service, compensation and prior commitments requested by the Board of Supervisors.

Virginia’s state revenue deficit is also cause for concern:

  • State budget deficit for combined (biennial) FY 2017-2018 budget years is $1.2 billion.
  • State budget cuts totaling $4.87 million have already impacted the county this current budget year, including teachers and constitutional officer’s salaries and grant funding.

Fairfax County Government FY 2018 Budget Forecast Presentation:

FCPS Budget Forecast
  • County Transfer: Almost 53 percent of the current county general fund budget is dedicated to FCPS.
  • Enrollment: Enrollment in FCPS continues to increase and surpassed the current budget projections. The projected enrollment for FY 2018 is 188,774 students.
  • Teacher Compensation: Teacher salaries continue to lag behind neighboring jurisdictions. In addition to state budget cuts in teacher funding for the current year, funding for FY 2018 may be impacted by the state’s budget deficit.
  • Classroom Resources: Investments are needed for textbook replacement, technology, student assessments and preschool.

FCPS FY 2018 Budget Forecast Presentation:

What Comes Next

Here is the full outline of how the budget process works between now and when the budget becomes effective on July 1, 2017.  Text only version

Image of FY 2018 budget process timeline

 

Budget Information Resources

 

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