With less than a month before Loudoun County supervisors are scheduled to adopt a fiscal 2014 budget, the board faces significant questions, including whether to leave the public school system grappling with a roughly $15 million shortfall and whether to approve a recommended 3 percent merit increase for county employees, at a cost of about $6 million.

After the first budget work sessions, the board’s motions and straw votes on a variety of local funding issues have resulted in a tentative local property tax rate of $1.21, lower than the rate advertised to county taxpayers.

Last month, Loudoun Administrator Tim Hemstreet presented a proposed $1.8 billion budget for fiscal 2014, a plan that maintained core government services and offered enhancements to certain funding priorities, such as local transportation and economic development initiatives.

Hemstreet prepared a budget assuming an equalized real property tax rate of $1.23 per $100 of assessed value. An equalized rate would mean that average county taxpayers would not see any changes in their tax bills. But last month, Hemstreet told supervisors that the $1.23 would actually increase most tax bills by about 1 percent, resulting in about $15 million in additional revenue.

With the School Board’s requested budget totaling $859.7 million, the spending plan left the school system facing an $18 million shortfall, a number reduced to about $15 million because of unanticipated state funding.

Supervisors face a choice: hold to the $1.23 tax rate and use the additional revenue to fund the school budget or other initiatives, or return the extra money to taxpayers and force the school system to come up with additional cuts to save millions of dollars.

Cuts to schools and nonprofit organizations were of paramount concern to speakers at three recent public hearings about the budget. Scores of parents and school system employees asked county leaders to fully fund the school budget. And numerous supporters of Loudoun Interfaith Relief and Brain Injury Services implored supervisors to reconsider the proposed 20 percent reduction in funding to each organization.

This week, as supervisors completed their review of funding for regional and local organizations, full funding was restored to Loudoun Interfaith Relief, but the nearly $4,000 funding cut to Brain Injury Services will proceed as recommended, county officials said.

Supervisors have also focused on public safety and economic development initiatives and transportation issues. This week, supervisors approved nearly $500,000 to support the continuance of Virginia Regional Transit Authority bus routes in Loudoun. The service, a federal grant-funded rural transportation program, lost its funding after it was determined that the routes no longer qualified as “rural” transportation, said Ben Mays, Loudoun’s chief financial officer.

“That was a big discussion,” Mays said. “We’re going to work with the state to try to figure out how not to lose the service, but we were facing about a $500,000 shortfall” for fiscal 2014, he said.

County and state officials are both working to devise a longer-term contract solution, Mays said.

To date, the fiscal adjustments made to the proposed $1.8 billion county budget have not had a notable effect on the overall number, Mays said. The decisions that will have the biggest impact will come when supervisors decide how to proceed with the school budget and whether to approve the merit increases for county staff.

It’s not yet clear how the supervisors will address the school budget, but at a March 4 joint budget work session with the supervisors and the School Board, supervisors again emphasized the need for the school system to reduce costs and find efficiencies.

Supervisor Ralph Buona (R-Ashburn) also voiced frustration that the board is often accused of cutting the school budget, when in fact it regularly increases spending.

“Last year, we gave you $66 million more than what you got the year before,” Buona told School Board members. “I want the public to understand clearly that we are increasing the school budget year over year . . . you can’t sustain that in the long term.”

Supervisors urged the School Board to consider measures that could lower costs, including closing smaller schools in western Loudoun, reevaluating whether to apply changes to retirement and benefit plans to current employees, and streamlining functions with the county government where possible.

But School Board members pointed out that salaries account for 78 percent of the school budget, and reducing salaries could make Loudoun less competitive.

School Board members Brenda Sheridan (Sterling) and Thomas Reed (At Large) both said that Loudoun would run the risk of losing talented educators to neighboring jurisdictions that can offer higher salaries and better benefits.

“We were a training ground once before, and we don’t want to go there again,” Reed said.

Supervisors will continue their review of the budget at a work session Thursday, scheduled for 6 p.m. in the board room of the Loudoun County Government Center in Leesburg. Additional work session dates and meeting documents are at www.loudoun.gov/budget. The board is scheduled to adopt a fiscal 2014 budget at its April 3 meeting.