Loudoun County budget hinges on state lawmakers' decisions
Sunday, January 31, 2010
With the yearly budget-setting period at hand, Loudoun County's financial picture is as cloudy as ever.
County leaders say they don't yet have answers for some major questions. Will the school system budget be allowed to grow or be deeply cut? Will leaders be forced to slash county services and cut hundreds of workers' jobs? And what will happen to tax rates?
Answers hinge on decisions to be made by lawmakers in Richmond, Mark Adams, the county's chief financial officer, said in an interview last week.
"You always have unknowns going into any budget cycle," he said. "But the size of them makes this year different."
Adams and other county officials are worried that the school system might lose $34 million in projected state aid if the governor delays implementation of a new local composite index, the complex formula used to determine the cost of education and how much should be covered by local governments.
The index is updated every two years and is based on numerous factors, including income levels and property values. The Board of Supervisors voted this month to send a letter to Gov. Robert F. McDonnell (R) asking him to release the money.
"It would cover a great deal" if the county had the money, Adams said.
Adams said the money would allow the $25 million budget increase the school system is seeking from county revenue sources. Without the increases, the school system has designated a long list of potential reductions.
Among the items that could be targeted for cutbacks are elementary school foreign language programs, buses for after-school activities and field trips, and assistant athletic directors and trainers. Athletic fees might be increased.
Adams said the other big question mark from the state is how much state aid the county will receive related to the personal property tax, known as the car tax, Adams said.
The state pays local governments $950 million each year for the costs of giving relief to car owners, a figure that removes some but not all of the burden from residents. Loudoun budget writers expect to receive about $48 million in car tax reimbursement money for the new budget. But because the state is facing a $4 billion budget shortfall, Adams and other county officials aren't sure whether Richmond will release the money.
"They are big questions," said Supervisor James Burton (I-Blue Ridge), chairman of the supervisors' finance committee. "It remains to be seen what the General Assembly and the governor will do about the car tax issue. I don't know what to expect from them."
Adams and Burton said they expect the state to deliver answers by March, when lawmakers are scheduled to adopt a state budget.