Fairfax Faces $220 Million Shortfall

School spending accounts for more than half of the county's operating budget, so the only way to close those gaps is to reduce spending or raise county taxes. Connolly warned Schools Superintendent Jack D. Dale that he hopes to keep Fairfax's tax rate at its current level of 89 cents per $100 of assessed value.

Dale agreed that some belt-tightening would be necessary but would not say what programs he is considering trimming.

"We have been well aware of the continuing decline in the revenue forecast that the county faces for some time," he said. "The budget that I present on Jan. 10 will reflect some significant cuts to recognize our current economic outlook."

Long offered some good news in the health of the county's commercial property base. He also noted that Fairfax continues to enjoy job growth, unlike in the recession of the 1990s, when county revenues remained flat for nine years.

The turnaround in the county's financial fortunes has been rapid. In recent years, Fairfax has been able to absorb higher fuel and construction prices, the cost of educating new children and other growing pressures on government services because property values, and in turn tax receipts, have grown so dramatically. Property values grew 23 percent in 2006 and 21 percent this year. In 2008, values are expected to be flat, and they are expected to drop 4 percent in the subsequent two years.

Similarly, county revenue grew almost 10 percent in 2006 and more than 4 percent this year. But Long predicted that revenue will grow minimally next year and not at all the following two years.

By 2011, with no program cuts, the county will face a budget shortfall of more than $500 million if the trend continues, he said. And with each penny on the real estate tax rate generating $22.7 million, it would take more than a 20-cent increase to generate the money needed to close that gap.

Staff writer Kristen Mack contributed to this report.