FY 2024 Budget - The Good, the Bad, and the Ugly

May 2, 2023

In this issue…

FY 2024 Budget - Good, the Bad, and the Ugly – Today the Board voted 9 to 1 to approve the FY 2024 budget. The marked-up budget includes some very good items, including my proposed full funding of the market rate adjustment for county employees who provide critical services to our residents and takes another important step towards addressing our public safety staffing crisis. However, it did not go far enough in addressing equally important areas, like reducing the almost 7 percent tax increase for the average homeowner, and completely ignored the continued overspending by FCPS. On Friday, I presented an alternative budget that would have reduced the tax bill 5 percent to offer our homeowners some relief in the midst of high inflation and increasing assessments. The Board has been pushing a false narrative that we can either address workforce issues or reduce the tax burden on residents, but my proposed alternative budget shows we can do both with reasonable reductions.

The Good – Fully Funding Our Workforce and Looking for Savings

Even though I voted against the budget mark-up changes, I was glad to see the Board finally recognized the importance of retaining our workforce, the engine for critical County services. The budget mark-up changes included my proposal to fully fund the market rate adjustment for County employees, which is something the Board has historically promised to employees and often has not delivered. See my last newsletter for more on my proposal and the workforce challenges the County is facing.

In addition to prioritizing our workforce, the budget includes guidance I have been pushing for years: that the FY 2025 budget “focus on identifying expenditure savings or moderating expenditure growth.” I have repeatedly said that the Board has a spending problem, not a revenue problem, and its spending is unsustainable. We are (unfortunately) approaching a very challenging budget outlook next year that even staff have referred to as “bleak.”

The Bad – Not Going Far Enough to Address Police Compensation and Tax Reduction

For the last three years I have asked the Board to address the crisis of recruitment and retention in the Fairfax County Police Department. For the FY 2024 budget, I proposed a 12.5 percent increase for police officers 2^nd Lieutenant and below to make our pay competitive with surrounding jurisdictions (see my proposal). While it was great to see the budget mark-up package include some adjustments to police pay, it’s disappointing that the Board did not go further.

Similarly, while I was happy to see the budget includes a tax rate reduction, a 1.5-cent reduction on the tax rate is not nearly enough for taxpayers struggling with high assessments and inflation. With over $110M unappropriated in the adjusted advertised budget, the Board could have easily cut the tax rate by around 3.5 pennies without having to look for savings. This Board has spun the false narrative that it can only fund employee compensation or a tax reduction, but not both, as if all prior spending commitments and budget line items were written in stone. The reality is that if the Board made tough decisions to prioritize the needs and affordability of our residents, both would be possible (see my alternative budget).

The Ugly - The Unchecked $2.6 Billion FCPS Transfer

Despite thorough evidence of excess, the Board rejected my proposal for a reasonable reduction to the FCPS budget today. Even though the FCPS budget makes up over half of the County’s $5B General Fund, it is the least scrutinized part of the budget. Despite recommending reductions, I have always included teacher raises in my alternative budgets and supported funding our schools as a priority, putting money in the classroom where it counts. Below, I’ll share with you some of the most concerning parts of the FCPS budget that have gone unchecked for years, contributing to higher taxes for residents without delivering a better service.

Over Projecting Enrollment - In each of the last two years, I have proposed reducing the school transfer by approximately $100M due to an analysis of student population levels and some fairly obvious over projections of several non-personnel accounts. While my colleagues have accused me of demanding FCPS cut teacher positions with that reduction, FCPS affirmed my assertion in the following year’s budget that it had over projected enrollment needs by the amount I proposed.

Exorbitant Carryover Balances - In addition, a quick look at the carryover balances for each of those two years shows that FCPS carryover balances have grown by over $100M in each of the last two years. The amount of “assigned” carryover grew from $124M in FY 2021 to $215M in FY 2022. These “assigned” funds represent uncommitted requests from schools, most of which have not been thoroughly reviewed or approved. To put this in perspective, $100M is the equivalent of roughly $230 for the average taxpayer that FCPS held on to for the year but didn’t need.

Questionable Line Items - A review of the FY 2024 proposed school budget by spending category also clearly shows some unexplained increases. In the Materials and Supplies line alone, the school budget proposes spending $28M more for FY 2023 and FY 2024 than in the previous three years combined. Yes, $28M more in two years than in the previous three years combined. There are several other accounts in which similar anomalies exist.

Student Population Decreases While Administration Increases - The historical trend of FCPS budget increases shows $500M more than pre-pandemic average spending despite a decrease in student population. The FY 2024 proposed school budget request includes a significant increase in administrative positions despite the reduction in the number of students. These increases are in both central office and school-based administrative positions, including an additional 17 assistant principals. Our teachers’ number one complaint is the increase in administrative burden that keeps them from teaching. Despite the overall decrease in student population, central office positions have increased. This increases the burdens on both teachers and on taxpayers. Despite overinvestment in administrative positions, teacher attrition and student achievement gaps continue to be concerns. FCPS SAT scores have fallen 27 points while the rest of Virginia has increased by 14 points. Montgomery County has also seen significant increases in their SAT scores.

The FY 2024 proposed school budget request also includes $65.2M for an additional student population of 2,382 at a cost of over $27K per student. Interestingly, when the student population was reduced, the savings were shown at $16K per student. This difference has not been adequately explained. According to the McLean Citizen’s Association (MCA) FY 2024 Resolution, these projections have not been adequately reviewed and have been overstated in nine of the last 11 years.

Despite the size and importance of the FCPS budget, no other Board members or School Board members have asked critical questions about these inaccuracies. Our job as Supervisors is to be a check on the school budget, not to issue a blank check. Our schools, recovering from the pandemic, as well as teacher and classroom support are critical priorities that can be adequately funded in my alternative budget proposal if made priorities over administration.

Other Items of Note

In addition to the alternative budget, I proposed two additions to the Board’s Budget Guidance which direct the preparation of the FY 2025 budget. These common-sense proposals did not get support from the Board:

Have the Auditor to the Fairfax County Board of Supervisors Review the Fairfax County Public Schools (FCPS) enrollment assumptions and general calculations - The Fairfax County Public Schools transfer makes up over half of the County’s General Fund (52.2% for FY 2024) yet it is subject to the least scrutiny. Over the last several years, the FCPS carryover has grown to more than $200 million dollars, projections look out of line and student enrollment projections have been overstated in nine of the last eleven years. The County currently does not require FCPS to return excess funds from enrollment projections and does not verify student enrollment, demographic and geographic distribution assumptions FCPS uses to calculate its requested transfer. As recommended by the McLean Civic Association and others, I requested that the FY 2025 Budget Guidance include a review all FCPS enrollment and other key budget assumptions by the Auditor to the Board of Supervisors and the Audition to provide a report on the findings to the Board of Supervisors and the County Executive.

Conduct a Review of all County positions including current vacant positions – I requested that the Board direct the County Executive to conduct a review of all positions with a focus on those that have been vacant for some time. The review would include a comparison of the position description and the actual responsibilities for each position. The review would concentrate on positions that have been vacant for some time and have not been actively attempted to be filled and could be eliminated.

Based on the response I received at the initial markup session on Tuesday, I did not make a motion Tuesday to set up a reserve for park maintenance projects. The Board heard testimony from a number of residents on the condition of our parks. Our parks are important to our residents, impacting their physical, mental, and emotional health. With the frequent use of our parks during and post pandemic, we need to make sure we are devoting sufficient funds toward maintenance of these assets. I asked that the Board set up a reserve for critical park maintenance projects, funded through quarterly reviews and carryover, that can be allocated to the parks for these projects.

Also, based on the response Friday, I did not formally make a motion to do what many other counties do and direct the County Executive to advertise a budget that includes a tax rate decided by the Board. On Friday, I proposed that the County Executive propose a FY 2025 advertised budget that results in no more than a 3 percent tax increase for the average homeowner. The advertised FY 2025 budget would include a list of the proposed reductions and the resulting impacts proposed to reach that tax rate. This suggestion was not included in the approved guidance.

As always, I would appreciate your thoughts and comments on the budget.