Fairfax County officials plan to put additional millions in fiscal reserves as they brace for the economic fallout from Trump administration policies to take hold.
County staff are recommending that the Board of Supervisors allocate $2.4 million more for reserves, with an additional $8.1 million available that also could be sent there or used to address other priorities.
“We continue to be conservative,” Phil Hagen, director of the government’s Department of Management and Budget, said when the board’s budget policy committee met on Tuesday (March 25).
The funding slated for reserves comes from extra revenue anticipated to be available after the third quarter of the county government’s fiscal year 2025 wraps up next Monday, March 31. The Board of Supervisors will officially approve allocations for the third-quarter revenue in May, at the same time it finalizes a new budget for fiscal year 2026.
The FY 2025 budget, which runs through June 30, is benefiting from lower costs in some areas coupled with better-than-expected interest rates in the county’s investment funds, Hagen told supervisors.
There also have been savings in a number of departments, and in the overall cost of employee fringe benefits, he said.
However, the county also is facing higher than anticipated costs ($5.6 million) for retiree health care, especially related to prescription drugs.
Hagen told supervisors that staff favor augmenting existing contingency funds “given the uncertainty” of the region’s economy and general stability, as the Trump administration continues to slash federal jobs and funding.
Braddock District Supervisor James Walkinshaw agreed, urging his colleagues to consider “setting aside as much of the available balance” as possible when a final decision is made in early May.
At the state level, Virginia Gov. Glenn Youngkin also proposed putting more money in a rainy-day fund in case of an economic downturn in the amended budget bill he released on Monday (March 24).
With the remaining extra third-quarter revenue, county staff suggested funding other items, including:
- $14.3 million for facility infrastructure repairs and upgrades deemed urgent
- $8.9 million for additional information technology infrastructure
- $5.3 million for the Fairfax County Park Authority, mostly for repairs and upgrades at rec centers
- $1.6 million for additional vehicle replacement
- $900,000 in support of a countywide commemorative event to mark the nation’s 250th birthday in 2026
- $100,000 to support Volunteer Fairfax, which has seen a decline in fundraising
The proposal would also convert 30 existing jobs to merit-based positions with full benefits, including 27 under the Fairfax-Falls Church Community Services Board — which provides mental health services — and three within the park authority. The changes will not require additional funding.
Members of the public wishing to weigh in on the proposal will have their chance during annual budget hearings set for April 22-24. Staff will finalize its recommendations for the third-quarter review three weeks later, once “updated, fine-tuned” figures are in, Board Chairman Jeff McKay said.
The Board of Supervisors is scheduled to approve the third quarter review when it marks up the FY 2025 budget on May 6. The new budget will then be formally adopted on May 13.
