Even as the current Fiscal Year 2020 began in July, Loudoun budget officers had already been looking ahead to how much tax money the county expects to collect in Fiscal Year 2021. And while revenue projections won’t be available until October, so far, they say, economic indicators are strong for Loudoun.
During a recent Board of Supervisors’ finance committee meeting, county budget staffers cited world economic outlook projections from International Monetary Fund, the Organization for Economic Cooperation and Development and the World Bank, which predict another year much like the last. That would mean continued growing revenues for Loudoun County.
“They key takeaway here is that it’s very similar to where we were last year,” said Management and Budget Director Erin McLellan. “The only thing that we’re really tracking as a potential risk is some increased talk about a recession. There is a little bit more risk of recession in the next couple of years than there was last year, according to economists that are surveyed on a regular basis, but at this point there’s no reason for us to alter the way we’re forecasting.”
All three international organizations cited some threats to the world economy from government policies like trade restrictions and tariffs, historically high levels of corporate debt compared to earnings coupled with rising interest rates, and banking crises or national debt crises such as in the European Union.
National, state and local forecasts show more of the same going forward—especially in Northern Virginia’s housing market, where values continue to climb, meaning more real estate tax revenue for Loudoun County government. Loudoun also shows lower unemployment and faster employment growth than the region and state.
The county Board of Supervisors has been squeezing a lot into their always-busy budget over the past two years. In addition to the constant pace of construction, including filling in where the state continues to fall further behind on its obligation to build roads, the county government has been investing in itself as it staffs up to match its population growth. In the current budget, according to a report to the board’s finance committee, supervisors funded 208 new hires, which county departments are working to bring on now.
Next year that spending will likely continue as the county enters the third year of its three-year plan to catch its staffing levels and payscales up to other Northern Virginia jurisdictions.
Loudoun’s government staff, relatively small compared to its population and the number of ongoing government projects, has meant contracting a lot of consultant help—which finance committee Chairman Matthew F. Letourneau (R-Dulles) said may not be the cheapest way to do business.
“We’ve brought in a lot of external help,” Letourneau said. “I kind of want to look and see what has that actually done and is that a good model. Is it efficient for us to be using as many consultants as we are using to provide some of these services, or should we bite the bullet and just simply add more internal staff?”
With that growing government, Letourneau pointed out, the county will also at some point have to spend serious money to get more office space.
County budget officers will return to the finance committee with projections both of revenues and budget needs in the fall.