FY 2022 Budget Forecast: Pandemic Impacts Projected Revenue, Priorities

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The Fiscal Year (FY) 2022 Budget forecast was presented by Fairfax County Government and Fairfax County Public Schools (FCPS) representatives on Tuesday, Nov. 24, to a joint meeting of the Board of Supervisors and School Board. The pandemic is expected to continue impacting revenue as well as funding needs for the upcoming fiscal year budget.

While the county’s residential real estate market remains strong, with a projected value increase of 3% in FY 2022, the nonresidential real estate market continues to be impacted significantly by COVID-19. Hotel, senior care and retail properties show the largest declines. Budget officials are projecting a 10% decrease in nonresidential real estate value in FY 2022.

County, Schools Budget Shortfall

According to the forecast, FY 2022 revenue is projected to remain flat, with no growth anticipated in Real Estate or Personal Property taxes—the county’s two biggest revenue categories. As a result, the budgetary shortfall forecast for FY 2022 is $40.6 million for the county and $32.5 million for FCPS, which must be addressed before the budget is adopted in May 2021 .

Of new projected county expenditures for FY 2022, the total includes funding over FY 2021 for:

  • Operations and maintenance costs for new county facilities (South County Police Station, Scotts Run Fire Station, Lee District Community Center and Sully Community Center) totaling $12.7 million.
  • Recurring impact of FY 2020 Carryover Review adjustments (body-worn camera program, ongoing funding for COVID-related positions, staffing at Lee District Community Center and for the Climate Adaptation Plan) totaling $12.3 million.
  • Employee benefit costs including retirement rate increases and health insurance premium adjustments, totaling $12.1 million.

Of new projected FCPS expenditures for FY 2022 the total includes funding over FY 2021 for:

  • Employee benefits (retirement plans and health care) totaling $19.3 million.
  • FCPSOn initiative funding totaling $6.3 million.
  • Contractual expenditures (utilities, major IT projects, facilities) totaling $5.6 million.
  • Enrollment growth and students’ needs totaling $3.5 million.

Additional Unfunded Priorities

This year the forecast notes several county priorities not factored into the forecast projections, including the potential need for additional pandemic response program funding for contact tracing, non-congregate shelter and basic needs support. Without additional federal pandemic stimulus funds, existing resources may be used to cover pandemic response costs, including the General Fund Pandemic Reserve created as part of the FY 2021 Revised Budget Plan.

County compensation adjustments, Diversion First, the Opioid Task Force, Commonwealth’s Attorney’s Office support and expanded library hours are also among those priorities noted but not included in the forecasted shortfall.

Unfunded FCPS needs in the forecast include $5 million for English learner staffing and $3.5 million for additional technology support specialist positions; $2.8 million for the final year of a three-year plan for instructional assistant salaries; and $2.4 million to implement the phase one recommendations from an external review of FCPS Advanced Academic Programs.

What is the Budget Forecast?

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

More than half of the county’s General Fund budget is disbursed to FCPS. County government and FCPS continue to work together to make the most efficient use of tax dollars while maintaining a high level of services.

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