Arlington County’s budget director presented the FY25 financial closeout Nov. 15 and outlined early indicators for FY27, telling the board departments ended FY25 nearly at budget with only about $1.8 million in discretionary funds available after reserves and carryovers.

The manager recommended allocating roughly $275,000 to the Safe Havens supervised visitation program and using the remaining closeout balance to cover anticipated compensation and benefit overages in FY26. Staff reported health-care expenses exceeded FY25 budget by about $7.7 million (driven by high-cost claims and increased utilization) and public-safety overtime added roughly $8 million to personnel spending. The county’s Affordable Housing Investment Fund stands at about $111 million, largely committed to projects.

Looking ahead, staff identified revenue risks: weak consumption taxes, the potential for reduced commercial assessment growth tied to office vacancies, and federal funding uncertainties including SNAP adjustments. For FY27 the county estimated a preliminary ongoing funding gap between $35 million and $45 million once collective-bargaining costs, health-care trends and WMATA obligations are included.

Staff outlined levers to close gaps — raising tax rates, deferring capital projects, hiring freezes or program reductions, and use of stabilization reserves — and said the board had set aside $11 million at budget adoption to stabilize uncertainty. The manager will return with budget proposals in February; the board scheduled further deliberations and a recessed meeting on Nov. 18 to continue closeout action items.