This article originally appeared here, at annandaletoday.com
Fairfax County’s budget forecast for FY 2026 projects a $292.7 million shortfall, due to declining office property values, rising employee compensation, and limited revenue growth.
County Executive Bryan Hill and Fairfax County Public Schools Superintendent Michelle Reid presented the budget outlook to a joint budget policy committee meeting with the Board of Supervisors and School Board on Nov. 26.
The county faces significant financial challenges for the upcoming fiscal year, potentially resulting in major spending cuts. The dark economic picture is also expected to bolster a meals tax proposed by Supervisor Dalia Palchik (Providence), which was approved by the board by a 9-1 vote in May.
Preliminary estimates call for $33 million in cuts to county programs and services. Agencies submitted reduction options totaling 10 percent of their budgets.
According to the budget document, a 4.78 percent increase in residential property values resulted in a projected 1.8 percent increase in general fund revenue. But that’s not enough to offset rising costs.
While the residential real estate market remained robust in 2024, it’s been a different story for commercial real estate, as office property values declined for the second year in a row. Office buildings with elevators are expected to decline in value by 8.5 to 9.5 percent.
The budget document projects a $111.7 million increase in funds for collective bargaining agreements, merit pay increases, and cost-of-living adjustments for public safety and other county employees.
The FCPS forecast reflects the first year of costs associated with a recently negotiated collective bargaining agreement, which includes a 7 percent compensation increase for staff. FCPS collective bargaining costs are estimated at $240 million over the amount approved for the current year.
The budget forecast does not call for additional investments in affordable housing, Metro contributions, or program expansions.
FCPS Superintendent Michelle Reid will announce a proposed budget for FY 2026 on Jan. 23. Hill will present the advertised county budget to the Board of Supervisors on Feb. 18.