The Board of Supervisors has released half of the frozen spending in the county budget, when it put $100 million into reserve in April as COVID-19 lockdowns began.
The pandemic response in the U.S. began as county supervisors were finishing their work on the annual budget. Facing a deadline to get that lengthy process done with enough time for county staff members to prepare for the new fiscal year in July, supervisors opted to pass the budget as is—without any changes to reflect the then-unknown upsets of the pandemic—and freeze $100 million in new expenditures.
The $100 million reserve includes $40 million in new county government spending at $60 million in school system spending.
The pandemic has driven down local tax revenues. A county budget staff report Dec. 15 notes that without that $100 million in reserve, the county would likely be about $20 million in the red this year. Loudoun cannot legally run a deficit—by state law, its budget must be balanced every year.
The $50 million release accounts for the Office of the Commissioner of the Revenue’s worst-case scenario, still allowing the county to maintain a balanced budget even if the fiscal picture is dramatically worse than expected.
About $30 million will go to the school system and $20 million to the county. County administrators plan to use the money first for deferred pay raises, then some base budget costs such as contract and licensing cost increases, then new staffing approved but frozen in the current budget. The School Board also has made retroactive pay raises a top priority for the money.
Supervisors voted 8-0-1, with Supervisor Caleb A. Kershner (R-Catoctin) absent, to release the funds.