The budget we will approve today is dramatically different from the budget the County Executive advertised in February. As I begin my comments, I want to thank the Chairman, the County Executive and Budget staff for leading the effort to develop an appropriate budgetary response to the awful impact that COVID-19 is having on our local economy.
In February, our economy was strong and growing and we were all excited about the prospects for the upcoming fiscal year. The County Executive proposed, and the Board generally seemed to support, significant new investments in essential programs and services.
We expected that revenue increases would allow the Board to make new and additional investments in the community’s most important priorities--including our schools, employee compensation, affordable housing, early childhood opportunities, environmental investments, expansion of library hours, and support for arts and cultural activities.
Because of COVID-19, our hopes and optimistic plans have changed dramatically. On April 7, the County Executive produced a revised budget proposal that reflects the anticipated impacts of the virus. As the McLean Citizens Association stated in a letter to the Board, the County Executive’s April 7 changes to the first advertised budget were “careful, thoughtful and reflected a strong understanding of the potential impacts of the pandemic on the County’s residents, revenues, and expenditures.”
The budget we now have before us, like any proposed budget, is based on projections and assumptions about future revenues and expenditures. The County Executive has dramatically reduced revenue projections and removed most of the new funding originally proposed. The level of unprecedented uncertainty COVID-19 has created makes it very difficult to prepare accurate predictions and even more difficult to have a high level of confidence in the predictions that are made. While we all hope that the adverse economic impacts will be less than predicted by the County Executive, we must be prepared in case things get much worse before they get better. That is why I am very supportive of the substantial reserves created in the FY 2021 budget and the 3rd quarter review, including not committing significant portions of the CARES Act funding at this time. Because of this cautious approach, these reserves will be available to address COVID-19 impacts as necessary.
The uncertainty created by COVID-19 is also why I am very supportive of the commitment the Board is making to perform extensive reviews of the FY 2021 budget on a regular basis throughout the year. This will enable us to revise the budget if and as needed. This is also why I support directing staff to report to the Board not less than monthly regarding proposals for use of the reserves, including the CARES Act funding.
It is easy to point out all the things this budget will not do that the February advertised budget would have done. But it is also important to realize that even after the budget was revised to reflect the anticipated impact of COVID-19, we are still making significant and important investments in community priorities. While I am disappointed that we cannot fund raises at this time, we are funding a budget that protects County employee wages, benefits and jobs. While I am disappointed that the increase in the school transfer is less than originally proposed, I am pleased that we are still able to transfer almost $2.355 billion (or 52.7% of General Fund disbursements) to FCPS. This is a slight increase from the current fiscal year. And while we must defer adding $25 million to our affordable housing fund, this budget continues to make substantial investments in housing. In addition, the Board is expressing its commitment to aggressively move forward with zoning and other areas that have the potential to significantly preserve and increase the affordable housing inventory. I also expect that non-profits will use a significant portion of the CARES Act funding they receive from the County to support programs that will help some people find housing and help others stay in their homes.
I grew up in a small town where, for all practical purposes, the local economy died when the steel mills closed. And I have lived through some pretty tough recessions and bad national economies. But I have not seen economic suffering like COVID-19 has the potential to cause. Our first priority must be to address the public health crisis and we are doing that. We must also focus like a laser on economic recovery. While we will work to ensure that the adverse impacts are only temporary, the number of lost jobs and closed businesses caused by the virus is staggering. At all levels of government, including local government, we must help individuals and small businesses get through this so we can quickly return to a robust economy that benefits everyone who resides or does business in the County.
While we cannot fund all our priorities, I believe this budget makes a significant investment in the programs, services and infrastructure that are necessary to support economic recovery. I also know that much more will be required, and I believe this Board will do whatever is necessary. We have already created and funded a microloan program for small business. Today we will create the Nonprofit Sustainability Program, to support the viability of the County’s non-profit partners as they work through this challenging period. The Board has also directed staff to present additional recommendations for programs that support small businesses and non-profits. We will receive the initial proposals from staff at our May 12 meeting.
I am certain that, by working together, this Board and our entire community can meet the challenges presented by COVID-19 and that we will create an economy that is even stronger and more equitable than the one we had. I believe the investments and priorities reflected in this budget and in the 3rd quarter review are big steps in that direction.
