As the economic impacts from the COVID-19 pandemic continue, Arlington County is working to close the budget gap as a result of additional revenue shortfalls for the current fiscal year.
In April, the Arlington County Board adopted a budget for FY 2021 that anticipated a $56 million gap in revenue for the County government and Arlington Public Schools. However, County staff anticipated the County might need to revisit the FY 2021 budget as the economic impacts became more apparent.
Since then, revenues have continued to decrease and costs stemming from the COVID-19 pandemic have increased, leaving the County with an additional $28 to $39 million budget gap to fill.
“The crisis of the COVID-19 pandemic has changed how we must approach our current budget,” said County Manager Mark Schwartz. “Usually we would already be thinking about our next budget, but instead we must figure out how we will provide the services and programs in the FY 2021 budget and fulfill our primary obligations to Arlington residents.”
At the County Board Meeting on Tuesday, Oct. 20, Schwartz laid out a proposal for potential use of the “closeout funds” of $22.4 million in available money from the already completed FY 2020 budget. (Fiscal Year 2020 ended on June 30, 2020). As proposed, $13.4 million would be used for the FY 2021 budget, $2 million would be put into the County Manager contingency fund, $2 million would support an employee separation contingent, and $5 million would be set aside to address COVID-related expenses in the FY 2022 budget.
To close the remaining FY 2021 budget gap, the County will use $9.3 million of approved federal CARES money for COVID-related staffing costs, $2.4 million in savings resulting from debt refinancing, and $8 million from service reductions and delayed facility openings.
“We are still in a tenuous situation,” Schwartz said. “We are already feeling the pain, and these challenges will continue — with the potential for even more adjustments in the current budget. And, as we look at next fiscal year, we will have pressures from increased commercial vacancy rates, lowered tax and fee revenue, and ongoing needs from our vulnerable populations and business community.”
To provide feedback on the proposed use of FY 2020 closeout funds, the community can visit with Board members during Open Door Mondays, email comments to firstname.lastname@example.org, or sign up for the public hearing at the County Board’s November meeting.