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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

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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