As Prince William County residents and officials brace for looming federal budget cuts set to take effect March 1, the county’s position on whether local dollars should replace federal ones for government programs stands in contrast to other regional jurisdictions.
The Prince William Board of County Supervisors has a “clear policy,” said county spokesman Jason Grant, of not replacing dollars for federal and state programs. That’s why the county has not set aside any funds for the potential cuts known as “sequestration,” he said.
While the county has a $30 million “rainy day” fund, no amount the county could set aside could backstop the nearly $137 million the county receives from the federal government annually, Grant said. “There’s no value in that for us,” he said of putting aside funds.
In Fairfax County, supervisors set aside about $8 million last year as a buffer against federal reductions.
Unfunded mandates that are a matter of law must be funded, but localities have not received official word on whether they are on the chopping block.
Public safety, transportation and education are the county’s three prime responsibilities, said Board Chairman Corey A. Stewart (R-At Large), and he said cuts to those programs would be more likely to receive county funding than social services, parks, libraries or other programs.
Still, the county would only dip into reserves to prevent “catastrophic” cuts or a large local tax increase, Stewart said.
As the economic recession hit and the housing downturn began about five years ago, the county began to make deep cuts that Stewart believes put the locality in a better position to deal with another economic blow, he said.
“A lot of local governments were drawing down their reserves anticipating economic growth,” Stewart said. “Well, the future is here. Instead of drawing down our reserves ... we’re in much better shape to face sequestration.”
The possible federal cuts have also affected next year’s budget talks. Supervisor Peter K. Candland (R-Gainesville) said that the primary thing the county can do is to keep a low real-estate tax rate, especially since so many county residents are involved with federal government work and could lose their jobs or part of their income. He and Stewart have both pushed for an average flat real-estate tax bill.
“We need to take a proactive position and not sit around and think everything is going to be wonderful,” Candland said.
Stewart echoed the chief complaint of other regional leaders, saying that the uncertainty and complexity of the cuts puts leaders in a difficult position to plan. If Congress does not act by March 1, the federal government must begin to make cuts totaling $1.2 trillion in the next decade.
Northern Virginia, with its large share of federal and defense industry workers, is particularly in the crosshairs. In Prince William, which has offices for several large federal contracting firms, including M.C. Dean, Lockheed Martin and American Systems, about 12 percent of the local workforce are tied directly to federal expenditures, according to the county’s department of economic development.
Federal facilities and contractors employ more than 13,500 workers, statistics show. However, more than 60 percent of the county’s 200,000 workers commute outside the county for work, and many are contractors or similarly involved with federal dollars working in or outside the District, according to census data and officials.
Most of the county’s 282 federal contractors are small firms, said Rob Clapper, president and CEO of the Prince William Chamber of Commerce. Those firms have especially begun to feel the effect of the looming cuts as agencies began to delay spending in recent months.
He said that Northern Virginia weathered the 2008 recession better than many parts of the country in large part because of consistent federal spending. That may change, he said, if the budget cuts are here to stay — particularly for the defense industry.
“What occurred in 2008 and 2009 across the country will mirror what Virginia has to endure over the next several years,” Clapper said. He and others are continuing to urge Congress to take action before the cuts hit.