Fairfax County revenues appear to be stabilizing, but the county still is facing a long-term budget imbalance that will require additional cost-cutting and make it difficult to make progress on long-term goals.
The Board of Supervisors has years of tough decisions in its future, said County Executive Anthony Griffin. But he added, “many of those challenges are going to be surmountable.”
It likely will take a mix of cost-cutting and new revenues, such as taxing restaurant meals, to close the funding gaps, according to Griffin and other county staff.
Assuming no increase in the county’s real estate tax rate, revenues are projected to increase by about 3 percent per year during the next five. During that same time period, costs are expected to increase about 5 percent per year, county Budget Director Susan Datta told supervisors Tuesday.
That estimate amounts to about $125 million per year that the county will need to trim from its budget or make up with some additional revenues to be able to cover employee salary increases, increased benefit costs, increased student enrollment in the public schools, inflation and repaying county bonds.
The county has some large construction projects on its docket that, along with other capital projects, will mean the county is close to maxing out its self-imposed borrowing limit.
Construction of a new mental health center is slated to begin this year at a cost of $80 million to $90 million. Work on a new $149 million public safety headquarters building also is planned for next year.
The county also is planning to spend about $45 million per year on new roads in Tysons Corner to accommodate redevelopment, and still needs to come up with $200 million to cover the rest of its share of Silver Line construction costs.
Those two big-ticket items are just one part of the $8.1 billion in planned transportation needs during the next decade. The county expects to have about $5.1 billion in revenue available for transportation needs through the commercial and industrial tax for transportation, issuing bonds and a minimal amount from state and federal. This leaves a deficit of about $300 million per year during the next decade, according to Transportation Director Tom Biesiadny.
Currently, unfunded projects include the sidewalk, trail and intersection improvements needed to provide better access to the new rail stations in Tysons Corner and Reston, and other road improvements needed to support anticipated growth in Tysons.
The deficit exists without the state shifting road maintenance responsibilities to the county — something that has been under discussion in Richmond this year.
Although the fiscal picture might seem somewhat bleak, the county has tools that can fill the gaps in transportation funding, Biesiadny said. There is the possibility of getting more state and federal funds than currently expected, albeit remote.
The county could also embark on public-private partnerships, implement a tax on restaurant meals or use special tax districts.
Under current state law, the only way for the county to implement a meals tax would be through a voter-approved referendum. Past attempts to do this in Fairfax and Loudoun counties have failed.
Supervisor Jeff McKay (D-Lee) said if the board does pursue such a proposal, it has to be made clear to citizens what they are getting — i.e. specific projects — in return for the new tax. And, the board would have to come through on completing those projects.
There might be a way to strike a “grand bargain” with citizens, said Supervisor John Cook (R-Braddock), if supervisors can convince them a meals tax would keep real estate taxes from going up.
“The numbers are falling together,” Cook said.
“We might not like them, he added. “We all might have to suck it up and do some things we don’t want to do.”
The board will continue discussing funding for its four-year transportation plan later this month, and will approve the transportation plan and capital improvement program in April.