Fairfax Budgets for Lean Years Ahead

First Revenue Declines Since 1992 Projected

The region's worsening economic climate has hit Fairfax County with its most difficult budget crunch in nearly two decades, prompting officials yesterday to propose flat spending on schools and government services for the year beginning July 1.

Fairfax is among the first localities in Northern Virginia to reveal in detail just how seriously declining home values and consumer spending will affect government services. After years of booming growth, the county is projecting a decline in residential property values of 3 percent -- and a decline in revenue for the first time since the 1992 recession.

County Executive Anthony H. Griffin said the slowdown in the nation's housing market, fueled by foreclosures and the subprime mortgage crisis, is mostly to blame for the bleak financial outlook. Declining interest income resulting from lower federal rates, as well as reductions in state funding, are also factors.

Griffin predicted that the crunch would last beyond the coming budget year.

"The residential real estate market is continuing to go south," Griffin told the county Board of Supervisors. "It hasn't hit bottom yet. It may be calendar 2010 or calendar 2011 before it does."

As a result, he said, prudence must be the county's response. His proposed $3.3 billion spending plan would keep the property tax rate at 89 cents for each $100 of assessed value, producing a tax bill of $4,450 for a $500,000 home. It would cut scheduled pay raises in half for county workers and fund virtually no new programs. That includes Fairfax's school system, which requested, but did not get, a 4 percent increase.

"We can't expect that all of our worthy causes are going to be fully funded," said Gerald E. Connolly (D), chairman of the Board of Supervisors. "We can't expect to fund new initiatives in this context. And we have to recognize that this is going to be a two- or three-year process."

The budget would raise a series of smaller taxes and fees, including charges for refuse collection, parking violations and county parking garage use. It also would add a 12-cent surcharge to the commercial property tax rate to help pay for transportation improvements, an increase permitted by landmark General Assembly legislation last year.

Because of declining home assessments, supervisors could choose to raise the property tax rate by 3 cents, to 92 cents for each $100, and still keep average property tax bills flat, Griffin noted. Such a rate increase would generate an additional $68 million. The supervisors will approve a final budget this spring after public hearings.

Griffin's budget is notable for what it leaves out. In addition to halving scheduled pay raises for public safety workers, the proposal wants to do the same for merit increases for other government workers. He has also proposed delaying approximately $40 million in transportation and storm water management projects to pay for other government obligations.

And he chose not to fund a $1 million expansion of the county's code enforcement strike team, a conglomeration of county offices seeking to crack down on zoning offenses as a way to fight illegal overcrowding in residential communities. The decline of older neighborhoods has become a critical issue for some supervisors, and several said yesterday that they want to see additional money for code enforcement in the final budget.

"It's the most important part that's missing from the budget and would be required to be in there to gain my support," said Supervisor Jeff C. McKay (D-Lee), a new board member who campaigned in large part to do more to fight blight in his district.