Arlington doesn’t have it as bad as other communities, but the pandemic is causing a drop in tax revenue that is likely to result in some budget cuts.
That’s the message from County Manager Mark Schwartz, who presented an update on the county’s finances at last night’s County Board meeting.
The main highlight from Schwartz was the county budget closeout — the allocation of funds leftover from the previous fiscal year’s budget, which closed on June 30. There was $22.4 million left over from the 2019-2020 budget, most of which Schwartz recommended using to boost the current Fiscal Year 2021 budget.
“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,” said a county press release, below.
The Board is scheduled to vote next month on Schwartz’s recommendations, after receiving public feedback.
While a number of local advocacy groups have traditionally used the budget close-out process to secure additional funding for various initiatives, that is likely to be curtailed this year. Schwartz reiterated his previous warning that the county and Arlington Public Schools are together facing a $56 million budget gap for FY 2021.
“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,” Schwartz said.
On the table for closing the gap, caused by a revenue shortfall and unexpected pandemic-related costs, is a reduction in county services. Schwartz’s presentation said that the county hopes to save $6.1 million by reducing some services and by not filling some vacant positions.
While holding out hope of saving money with a hiring freeze and preserving currently filled positions, Schwartz recommended that the Board set aside $2 million for “employee separation” costs, potentially including early retirements and buyouts.
From a county staff report:
As we work through development of the FY 2022 budget, we will be considering changes in how we deliver services based on our experience during COVID and due to anticipated revenue declines. This contingent would allow the Manager flexibility in addressing any impacts of these changes. As an example from prior years, we have offered various incentives for early retirement and other buy-out options. It is likely that these options will need to be effective prior to the beginning of FY 2022 (July 2021); thus, funding would be needed in FY 2021.
Other planned sources of savings outlined by Schwartz include debt refinancing ($2.4 million), federal CARES Act funding ($9.3 million) and “operational adjustments” — delayed facility openings ($1.9 million).
More from a county press release, below.