FY 2021 Budget Forecast: Focus on Board Priorities and Strategic Investments

budget forecast graphic

The fiscal year (FY) 2021 Budget forecast was presented by Fairfax County Government and Fairfax County Public Schools (FCPS) representatives on Tuesday, Nov. 26, to a joint meeting of the Board of Supervisors and School Board. Each November, the 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 are working together to make the most efficient use of tax dollars while maintaining our high level of services. The budget forecast for FY 2021 is similar to what we experienced last year – disbursement requirements (expenses) continue to increase for both county and FCPS budgets to address board and community priorities, school enrollment growth, new public safety facilities and employee compensation. However, revenue growth is not projected to be sufficient to meet anticipated needs, due in part to lower interest rates. Additional revenue will be considered as part of the FY 2021 Budget process in order to advance several of the Board’s priorities such as affordable housing and school readiness.

The county’s strategic plan is being finalized and will be presented alongside the FY 2021 Advertised Budget Plan. The strategic plan will inform the development of future budgets.

Bottom Line Forecast for FY 2021

Based on data available to date, county revenue growth is projected at 1.9 percent, which generates $85.7 million in additional revenue for FY 2021 (begins July 1, 2020) to cover:

  • $ 111.8 million in county funding priorities.
  • $ 163.8 million in FCPS disbursement requirements (funding needs), offset by $39.5 million in projected increases in FCPS revenue.

As a result, a budgetary shortfall forecast for FY 2021 is $71.3 million for the county and $79.1 million for FCPS, which must be addressed before the budget is adopted in May 2020.

FY 2021 Budget Forecast Summary:

County Budget Revenue Forecast

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

Residential Real Estate: Home values in the county are projected to increase 2.08 percent in FY 2021.

  • Home prices are up 3.6 percent through this October.

Commercial Real Estate: Commercial (nonresidential) property values are projected to increase 1.84 percent in FY 2021.

  • As of mid-year 2019, the overall vacancy rate is 14.4 percent – the fourth straight leasing period (half year) drop.

FCPS Budget Revenue Forecast

FCPS receives more than 72 percent of its funding from the county government. In FY 2020 that amount is 52.8 percent of the county’s general fund budget, or $2.35 billion. In addition, FCPS receives state and federal funding.

The FY 2021 forecast for non-county revenue includes a $36.1 million increase in state revenue and sales tax, part of a total $39.5 million increase in revenue from non-county sources.

Joint FY 2021 Budget Forecast Presentation

FY 2021 Budget Timeline

budget timeline
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