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Supervisors, School Board Grapple with Budget Shortfalls

Facing hundreds of millions in deficits in Fiscal Year 2014, Fairfax County leaders try to plan around federal sequestration, unpredictable revenue.

As the leaders of Fairfax County and its school system sat together Tuesday to stare down upcoming fiscal years threatened by larger-than-normal deficits and the potential impact of sequestration, both groups agreed they would have to take a new approach in future budget cycles, one that relies less on what has been done in the past and more on multi-year budgeting and reprioritizing wants and needs — a "new way of doing business."

"I think we have to look at things very differently and we have to be willing to take some risk on things we haven't done before," County Executive Ed Long said during a joint meeting Tuesday afternoon between the Board of Supervisors and Fairfax County School Board.

Combined with the loss of $61 million in one-time money the county used in fiscal year 2013, and projected dollar increases in spending — including in funds for schools, compensation and debt services — the county faces a shortfall of nearly $170 million in fiscal year 2014.

For more budget information, click here.

The school system itself faces a projected deficit of $93.7 million, not including another $68.4 million shortfall in "significant program needs," including restoring class-size reduction, extended teacher contracts, restoring clinical staffing, introducing more online and print textbooks and major and preventive maintenance.

The county anticipates being able to give the school system a $84.2 million increase in fiscal year 2014, about half of the $162 million the school system needs, according to budget documents.

The projections, of course, do not include any impacts federal sequestration will have on the county's credit rating — which could be downgraded depending on how and if Congress acts, Moody's Investor Services told Long — or access to funding.

The county currently relies heavily on at least $122 million in federal money, in federal grants, general fund contributions and funding toward housing assistance, aging grants and community services. Schools receive about $76.7 million in federal money for its operation fund and $35.6 million in grants, along with $26.6 million for its food and nutrition program, according to budget documents.

While personal property revenue is expected to rise 6.5 percent this fiscal year, and real estate tax revenue will rise about 3.3 percent, both of those areas — and all other revenue categories — will see less or no growth in fiscal year 2014, according to county projections.

And while Long expects the county will benefit from development along the Silver Line and in Tysons, among other projects like Mosaic, BRAC and the Springfield Mall redevelopment, the effects likely won't be seen until fiscal year 2016 or 2017.

"The best-case scenario for us is Congress is able to do something by the end of the year ... the sooner we know the better and the faster we'll be able to react," Long said. "Until then, we're all captive audience waiting to see what happens. These numbers could very well get worse."

Planning for the Unknown

As question marks pop up in place of dollar signs in state and federal categories, county and schools leaders are trying to find new ways to generate solutions.

For the county, that could mean both reductions — cutting department and agency budgets based on suggestions that come from a charge by Long to find 5 percent in savings next year — holding off on compensation increases for county staff and new approaches, such as exploring multi-level police and fire departments and new school buildings, as the county is in Tysons.

For the school system that could mean a flat transfer from the county or, as suggested by School Board member Elizabeth Schultz (Springfield), keeping the school transfer consistent as a frozen percentage of the county budget. Currently, the transfer to county schools makes up about 52.2 percent of the county's annual expenditures.

Schultz also suggested repurposing some of the county's vacant office space for educational uses, because the school system is at its borrowing capacity for renovations and lacks land and funds to build new schools.

The system is working with the state on an efficiency audit, which studies management of non-school based departmental efficiencies. Superintendent Jack Dale said those results will not be available until sometime next spring, but savings could amount to $10 million.

The school system has already frozen non-essential travel, Dale said. In September, he asked each of his departments to identify the consequences of a 5 percent non-school based reduction.

County supervisors told the school board it needed clear priorities — a discussion school board members have grappled with this fall as they try to define true needs versus wants.

One of them, said supervisor John Cook (Braddock), should not be any expansion of programs, noting the restructuring of Advanced Academic Placement Centers seemed like something that could be put on the backburner.

Dale said the realignment would bring cost savings.

Schultz noted there is a high comfort with county services, provided through both the county and the schools, "but this is going to be the beginning of some very difficult establishment of priorities and where we can provide and shine ... and where we [just don't have the money]."

The county held several community meetings in November that allowed residents to give input on how to close projected deficits; an online survey about the issue is open until Friday.

Dale will propose a fiscal year 2014 budget to the school board Jan. 10. Long will propose a county spending plan Feb. 26 to the Board of Supervisors.

See also:

Fairfax Schools Face Nearly $150M Deficit in 2014

Fairfax Board Auditor to Look at FY2014 Park Reductions

Fairfax County to Hold Meetings on FY2014-15 Budget

County Faces $3 Billion Transportation Gap

Fairfax Asks Governor for Human Services Funds

Rick S November 28, 2012 at 02:28 PM
Are they finally starting to realize that the real estate taxes are not a blank check for them to raise funds, at will. Maybe we need to look at all the positions at FCPS and compare with the private schools, who do it with less than half the staffing per school.
David Aims November 28, 2012 at 02:43 PM
Does anyone else think that maybe there is a connection between the school situation and the housing situation? Perhaps if Fairfax followed the lead of Prince William and was actually proactive in enforcing the immigration laws, we as a county would not be in this situation. Liberal or conservative, you cannot deny the fact that illegal immigration is part of the iceberg (the part underwater).
Kate November 28, 2012 at 09:01 PM
Of course there is a connection between the illegal alien sanctuary which FX County has become and the budget mess which they are in. If they enforced the immigration laws, then the schools would empty out of illegal aliens and the welfare offices would empty out and the spending would come back in line. As it is, the answer will always be to raise the taxes of those of us who actually work to support our own families so that we can support all of the illegals and their families as well.
Marie November 29, 2012 at 01:28 PM
I agree with Kate and David - FX county needs to enforce the immigration laws.
janet otersen November 29, 2012 at 05:21 PM
Fewer and fewer of taxpayers are expected to pick up the tab each year. Maybe we shouldn't provide near free housing to so many earning upwards of $80k, If someone can't afford to live in Fairfax then they should move farther out and not rely on Fairfax taxpayers to pay their bills. When FCPS stops spending $50k on a DisneyWorld conference and $35,000 on consultants for 21st Century Learning ideas,and trips to Asia, etc, then we'll know they are FINALLY serious about cutting excessive spending. Surely, with the hundreds of non-school based administrators earning 6 figure salaries, they can do training in-house. We cannot continue to crush the middle class with larger tax increases--we must cut expenditures at the central office. Maybe spending $10 million on on-line math textbooks that many can't access wasn't such a great idea either.
Dave Webster November 29, 2012 at 08:22 PM
As noted in the article, education accounts for about 52.2% of general fund expenditures. Fire and police come in at 12.4%. Any significant reduction in spending would have to come from these two areas. I don't think anyone is willing to cut education expenditures. Incidentally, if you take a look at Mr. Long's Executive Presentation, he appears to be saying there is little that hasn't been considered in the budget cutting process. Page 10 of this presentation is titled "We've Turned Over Every Rock." As Forrest Gump said: "I guess sometimes there just aren't enough rocks." Here is a link to the presentation: http://www.fairfaxcounty.gov/dmb/fy2014/fy14-15-county-budget-forecast.pdf I strongly disagree with Mr. Long that development along the Silver Line will bring in enough revenues for the County to add to the general fund by 2016 or 2017. As soon as the Silver Line is completed and is operational, Fairfax County will be required to pay into the Metro system a percentage of maintenance costs, etc. I don't think the additional revenue from tax dolars will be enough to offset those costs which have to be added to any Silver Line construction costs for which Fairfax County is responsible in excess of the dollar limits on the special tax districts. The Silver Line should be, in the best case scenario, revenue-neutral for years to come.
Jay November 30, 2012 at 03:03 AM
I think we are willing to cut education and police expenditures. I realize that the County response will be to declare that the cutbacks necessitate the elimination of all school sports programs, or something else that is irrational and designed to scare the public into paying even more in property taxes. The ransom tactics of the public sector truly reveal their motivations.
Dave Webster November 30, 2012 at 03:49 PM
As if right on cue, the Washington Post reports this morning the operating costs for the Silver LIne will be higher than expected. http://tinyurl.com/cdhenug
Walter Hadlock November 30, 2012 at 05:58 PM
I was just about to make reference to the same WPOST article. It seems strange that at this stage in building the Silver Line, Metro management "discovers" the Stadium-Armory Station is not fit to be the end of the line for the Silver Line. I can't help but think that the red flags raised by a number of readers are gradually coming true. And that was after they were battered by those suggesting the negatives weren't true or couldn't happen.
Bob Bruhns December 01, 2012 at 12:49 PM
If people are really interested in the fiscal cliff, tax hikes and budgetary shortfalls, they MIGHT want to get the Dulles Rail / Silver Line prices down to earth. Those prices appear to be $2.5 to $3 Billion high as things stand now, and then we need to pay interest on the money we will borrow to PAY those double prices. And WMATA promises to dwarf even THAT with its $13.1 Billion of deferred maintenance and Capital Needs. I have been reading audit reports on WMATA from US DOT and KPMG, and it looks much like MWAA, only worse. The FBI is already investigating MWAA; it needs to start investigating WMATA too. The price for Dulles Rail Phase II is two times what it should be, and one of Fairfax County's Dulles Rail Project Managers says that Phase I and also WMATA pricing are similar to Phase II pricing. Billions of dollars that we desperately need are being brazenly taken from us to pay needlessly bloated prices - people really need to wake up! http://www.bruhns.us/civic/DullesRail/Dulles-Rail---Silver-Line-overcost-report---Bruhns.pdf
JD December 06, 2012 at 09:07 PM
Oh Bob, you so silly. You keep on comparing construction costs to the F/S Extension (a 20 year old project) without taking into account inflation, union labor requirements and increase in construction costs/materials as accounted for by industry standards and practices. nevertheless, your conspiracy-theories always provide us with a hearty chuckle.
Bob Bruhns December 07, 2012 at 12:37 PM
Nice try, pen-namer JD, but the report assumes inflation at 1.7 to 2.0 over the period in question. Sorry if some people can't do simple arithmetic. And if our schools can't provide proper texts for the arithmetic and mathematics that they are teaching (or supposedly teaching) to our kids, that situation is going to get worse.

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