Fairfax County released its FY 2027 budget forecast on Tuesday at a joint meeting between the Board of Supervisors and the School Board, outlining revenue and expenditure trends that will shape the upcoming budget process. General Fund revenue is projected to increase by about 3%, or $225.5 million, in FY 2027 based on current tax rates, but will still leave an estimated $131.5 million combined gap.
The forecast reflects preliminary estimates and is intended to guide the upcoming budget development process; it does not represent a proposed budget. As required by state law, the county executive will submit a balanced budget to the Board of Supervisors in February, and the projected gap will be addressed through various measures including updated revenue estimates and potential adjustments to expenditures and/or tax rates.
Key Factors in Revenue Outlook
Steady residential real estate growth, uncertainty caused by federal actions, and the first full year of revenue from the new food and beverage tax, which takes effect Jan. 1, 2026, are all factors in the modest projected revenue increase. Nonresidential property values, however, particularly office buildings, continue to face downward pressure.
What’s Driving Cost Pressures
Despite the revenue outlook, required costs are rising faster. Much of the projected growth in both county and school budgets is driven by baseline obligations required to maintain current operations. These include employee pay and benefits under existing collective bargaining agreements — including the recently negotiated three-year SEIU contract for general county employees and agreed-upon increases for IAFF and SSPBA — as well as inflation in contracted services and mandated cost shifts resulting from state and federal actions.
The recent Weldon Cooper analysis reaffirms JLARC’s 2023 findings and highlights long-standing structural pressures: Virginia’s persistently low K–12 funding levels, the disproportionate return Fairfax County receives from the Commonwealth (about 50 cents for every dollar sent to Richmond) and ongoing state underinvestment in core services. These pressures are compounded by inflation, continued weakness in key sectors of the economy — including commercial real estate — and recurring threats of federal shutdowns or fiscal uncertainty, which are especially disruptive here. These factors shape the county’s budget environment and limit flexibility to meet community expectations.
County Has Made Significant Reductions
Over the past several budget cycles, the county has taken substantial steps to reduce spending. Between FY 2024 and FY 2026, more than $90 million in recurring agency cuts were implemented and more than 270 positions were eliminated to help balance the budget. Many of these reductions involved service impacts and operational changes across departments. For FY 2027, agencies have again been asked to identify reduction options, with an estimated $30 million in additional savings expected from that effort.
Schools Also Face Growing Base Requirements
Fairfax County Public Schools’ preliminary FY 2027 forecast identifies $193.8 million in required increases related to compensation, benefit rates, contractual costs and enrollment-driven needs. These figures reflect baseline operating requirements under current collective bargaining agreements and state mandates.
Combined FY 2027 Outlook
When county and school requirements are considered together, the early projection shows a combined shortfall of about $131.5 million for FY 2027. While this is smaller than last year’s early forecast, it remains a significant gap between available revenues and essential needs.
Next Steps in the Budget Process
- Jan. 22, 2026 — FCPS superintendent releases proposed budget
- Feb. 17, 2026 — County executive presents advertised budget
- April 2026 — Public hearings and Board of Supervisors budget deliberations
- May 5, 2026 — Adoption of the FY 2027 budget
- July 1, 2026 — FY 2027 budget year begins
More information will be available throughout the budget process at fairfaxcounty.gov/budget.
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