Fairfax County’s budget forecast for FY2026 shows a shortfall of $292.7 millions due to falling office property values and rising employee compensation.

County Executive Bryan Hill and Fairfax County Public Schools superintendent Michelle Reid presented the Budget Outlook to a Joint Budget Policy Committee meeting with the Board of Supervisors and School Board, on November 26.

The county is facing significant financial challenges in the coming fiscal year. This could lead to major cuts in spending. A dark economic outlook is expected to support a proposed meals tax by Supervisor Dalia Palchik, who was approved by the board in May by a vote of 9-1.

According to preliminary estimates, county programs and services will be cut by $33 million. The agencies submitted 10 percent reduction options for their budgets.

According to the document, an increase of 4.78 percent in residential property value resulted in an increase of 1.8 percent in projected general fund revenues. This is not enough to offset the rising costs.

The residential real estate market in 2024 remained strong, but the commercial real estate market has been different. Office property values have declined for the second consecutive year. The value of office buildings with elevators is expected to drop by between 8.5 and 9.5 percent.

The budget document anticipates an increase of $111.7 millions in funding for collective bargaining, merit pay, and cost-of living adjustments for county employees and public safety personnel.

The FCPS forecast is based on the first-year costs of a newly negotiated collective bargaining contract, which includes an increase in compensation for staff of 7 percent. The FCPS estimates that collective bargaining costs will be $240 million more than the amount approved this year.

Budget forecasts do not include additional funding for affordable housing, Metro contributions or program expansions.

On Jan. 23, FCPS Superintendent Michelle Reid is scheduled to announce a budget proposal for FY 2026. Hill will present to the Board of Supervisors the county budget advertised on February 18.

FairfaxGOP originally wrote this and published it as Fairfax County Projects A Budget Disaster