Fairfax Officials: Sequestration Would Impact Budget By Spring

Fairfax County is staring down projected budget deficits in both Fiscal Years 2014 and 2015 and officials are waiting anxiously for Congress to make a decision on sequestration cuts that would only make those gaps worse.

In a presentation Tuesday, County Executive Ed Long told Virginia legislators the county was projected to face shortfalls of $169 million in FY2014 and $274 million in 2015.

And there’s no telling what sequestration would do to those numbers.

The county currently relies heavily on about $290 million in Federal dollars, including $135 million for Fairfax County Public Schools, $58 million in Federal grants, $38 million for the General Fund and more.

“We can certainly hope that sequestration does not kick in but there’s a possibility that it will,” Long said. “We can only hope that Congress acts. It’s that unknown part right now, that makes it difficult to try deal with the county budget.”

Should Congress allow the cuts to go through, Fairfax County would feel them sooner than some might think, Long said.

Real estate taxes likely wouldn’t be affected until 2015, Long said, but the impact to sales taxes and transit occupancy taxes could hit as early as the second half of FY2013.

Business license and business personal property taxes probably wouldn’t move until FY 2014.

Long worried about the implications for money from the Commonwealth; cuts in allotments to state budgets would mean fewer dollars to localities.

County departments and agencies have already begun bracing for the future shortfalls. Long said agencies are operating with 8 percent vacancy rates in their budgets, and departments have identified up 5 percent each in reductions for the coming year.

“We have looked under every rock to try to find anything that’s out there without cutting into the core fabric of the community,” Long told state officials.

Beyond those concerns, the county also relies heavily on federal employees and contracting.

According to Long’s presentation, federal contracts accounted for $24 billion of the county’s FY2010 income.

And nearly 10 percent of FY2010 personal income in the county came from federal employees, for a total of $6.5 billion. In total, 23,361 people, or 4 percent of county workers, are federal employees.

“I think our worst fear is if Congress fails to act,” Long said. “What’s going to happen to the economy? I don’t think any of us think anything good is going to happen.”

See also:

Local Road Funds Unlikely to Come from General Assembly

County Faces $3 Billion Transportation Gap