Uncertainty remains as county leaders and budget staff begin looking toward the fiscal 2027 budget process.
“Overall, we’re kind of sitting in the same place,” said Philip Hagen, director of the county’s Department of Management and Budget. He was briefing members of the Board of Supervisors’ Budget Policy Committee on Sept. 16.
Hagen said there had been some good news and some bad news on the economic and political fronts since the last major budget briefing. As a result, county staff are moving ahead with the expectation of another complex budget season ahead.
“We’re going to have to make difficult choices,” he said.
As part of planning for the FY27 budget, county departments have been directed to submit proposals to reduce their budgets by 5%. While that figure is less than the requested list of cuts last year, it’s more likely a larger percentage will have to be implemented, Hagen said in the presentation.
The discussion came as supervisors were briefed on staff plans to use leftover funds from fiscal 2025 during fiscal 2026, which began July 1.
The county government recorded a carryover balance — essentially, a surplus — of $124.25 million for the fiscal year. Of that, about $26.4 million was in revenues above what was forecast, while $97.84 million was in reduced expenditures.
The dollar figures equated to 0.48% of the revenue budget and 1.72% of budgeted expenditures.
Those were the lowest figures in the post-pandemic era, and were typically in line with rates before 2020.
“This is a tiny, tiny sliver” of the overall budget, Board Chair Jeff McKay said. “Quite a bit smaller than it has been.”
Staff in early December will present supervisors with an updated budget forecast. Until then, “uncertainty might be an understatement,” McKay said.
“We’re getting hit on multiple levels,” the Board chair said of economic impacts of tariffs and federal-government downsizing. “There’s a huge potential impact. Belts tighten and times get tougher.”
“There are going to be impacts we might not even know about today that we’re going to be grappling with,” added Franconia District Supervisor Rodney Lusk.
McKay said it wasn’t outside of the realm of possibility that the county government could see its coveted AAA bond ratings at risk. “We’ve seen counties and entire regions in our state lose [theirs],” he said.
Hagen said staff would do its best to keep supervisors informed as the landscape evolves.
“Our team continues to monitor impacts,” he said.
Supervisors on Sept. 30 will hold a public hearing before determining how to allocate the FY25 carryover funds.
End of the line for Covid funding
As part of the county’s budget-closeout package, the final $7.57 million in federal Covid-era stimulus funds allocated to the county has been shifted from the fiscal 2025 budget to fiscal 2026.
That’s all that remains of just under $223 million in Covid funds the county received from the federal government, county officials said.
“We are nearing the end,” said Philip Hagen, director of the county’s Department of Management and Budget.
Federal law required that all funding either be fully allocated by 2024 or returned to the U.S. treasury. Having allocated all the remaining funds, Fairfax officials now must spend them by Dec. 31, 2026.
The $1.9 trillion American Rescue Plan Act (ARPA) signed into law by President Joe Biden in 2021 allocated $350 billion in funding for state, local territorial and tribal governments.
