County Experiences No Immediate Impact on Budget From State’s Shortfall

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Provided by Prince William County

Prince William County Seal

Revenues for Virginia’s general fund fell short of projections by 1.5 percent, leaving many jurisdictions concerned over the implications this may have for their local budgets. Prince William County, however, will not be immediately impacted by the state’s shortfall as the Board of County Supervisors did not include revenue contingencies in its Fiscal 2017 Budget. Rather, the county only budgeted for state revenue that was fully funded in the state’s two-year budget.
 
“Prince William County continues to realize the benefits of strong financial management practices put in place by the Board many years ago, including the long-established practice of only budgeting state revenues that are fully funded,” said Corey Stewart, chairman of the Board of County Supervisors. “Because we do not include revenue-contingent state funding in the budget, the county will experience no immediate impact from the state’s announcement of their shortfall.”
 
There is, however, an expected impact to the Prince William County Public School System, as the schools’ adopted budget includes revenue-contingent state funding for teacher salary increases. According to school officials, this reduction could range between $2-6 million. Schools will know more once they receive the official notice from the state about reduced school funding, which is expected in September.
 
In contrast to the state’s revenues, the county’s revenue projections continue to remain on track. General revenues are expected to produce an additional nearly $6 million from the adopted Fiscal 2016 budget due to a surplus from real and personal property tax revenues, specifically as a result of increases in new taxable business tangible property. Sales tax revenue is still on target to meet the end-of-year projection of a 3 percent increase.
 
The adopted state budget included funding a 2 percent pay raise to state-supported employees that include constitutional officers and their employees, general registrars and employees of community services boards, among others. The money slated for the pay raises was contingent on state income meeting revenue projections. Due to the shortfall, which amounts to $266.3 million, the state compensation board recently announced that the planned pay raises cannot move forward at this time.
 
When a budget shortfall is above 1 percent, Virginia state law requires a re-forecast of the state’s general fund revenues. Once the state has completed its revenue revisions and projections for the Fiscal 2017 budget, it’s possible that budget cuts to localities could occur this fiscal year. The Virginia General Assembly will consider any necessary reductions to the Fiscal 2018 budget during its 2017 session.
 
If there are cuts to the Fiscal 2017 budget, local jurisdictions will be notified in the late fall. Information about the county’s Fiscal 2017 Budget is available at pwcgov.org/budget.
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