Each year, Fairfax County residents contribute substantially to the Commonwealth of Virginia through state taxes. These contributions fund a wide array of services, from education and health to transportation and public safety, spread across the state. Yet when we examine the flow of resources more closely—specifically, how much Fairfax taxpayers send to Richmond compared to what returns in state spending and transfers—the imbalance is striking.
Although the Fairfax County Board of Supervisors has approached the Weldon Cooper Center at the University of Virginia to prepare a detailed analysis of the balance of payments with the commonwealth, my own back-of-envelope calculations for FY2024 show that Fairfax County taxpayers are sending roughly $2.5 billion more to Richmond than the county receives back.
This fiscal gap raises important policy questions about the structure of state-and-local finances in Virginia and about the sustainability of a system where one locality disproportionately shoulders the commonwealth’s fiscal burden.
How the numbers add up: my back-of-the-envelope calculations
The quick analysis (attached, with source references for transparency’s sake) focuses on the commonwealth general fund’s revenues and expenditures. In FY2024, Virginia collected roughly $27.8 billion in total general fund revenue. Fairfax County’s share of that revenue—driven largely by the county’s high concentration of taxable income and economic activity—was nearly $5.9 billion. The largest component was income tax, where Fairfax’s projected contribution (based on 2022 actuals) exceeds $4.5 billion, accounting for more than one-fifth of the entire state income tax base. Sales taxes and other taxes added another $1.3 billion.
On the spending side, the picture looks different. The Commonwealth directed about $30.6 billion in spending through intergovernmental transfers (aid to localities) and state direct expenditures. Based on actual allocations and formula-driven shares, Fairfax County received only $3.3 billion of that total. Intergovernmental transfers, such as school aid and human services funding, accounted for about $1.5 billion.
The level of benefit that Fairfax County residents receive from state direct spending in areas like higher education and public safety is more difficult to estimate. One might expect that Fairfax County residents benefit from state services more or less in proportion to the county’s population. However, it is likely that, in practice, Fairfax County residents benefit somewhat less from commonwealth spending compared to the state’s average. For instance, the crime rate in Fairfax County is roughly half of the state’s average, while the county’s poverty rate is also considerably lower. As a result, it is expected that the state directs its resources—intentionally or not—disproportionately to other, needier parts of the state. Three scenarios were therefore estimated, with Fairfax residents receiving 100%, 80%, and 60% of the state’s average benefit level, respectively. The middle estimate—based on Fairfax County residents receiving state services at 80% of the state’s typical level—indicates that total direct state spending is directed in favor of Fairfax County residents in the amount of $1.8 billion.
Subtracting what comes back from what goes out leaves Fairfax with a negative balance of payments of approximately $2.57 billion for FY2024. The higher and lower scenarios suggest a negative fiscal balance of $2.1 and $3.0 billion, respectively.
For context, $2.5 billion dollars per year is real money. This amount represents an annual net payment out of Fairfax County of over $2,000 per person, or a net contribution per Fairfax County household of over $6,000 per year.
The actual net fiscal incidence in the relationship between Fairfax and the commonwealth may actually be greater in real terms. For the purposes of this analysis, we ignore the fact that the cost of living in Fairfax County is much higher than in other parts of the state, and therefore, that the actual level of state service provision is actually probably even lower in real terms. Furthermore, the impact of redistributive federal taxes and the county’s disproportionate funding of the Commonwealth Transportation Fund are also not addressed in the current calculations.
Why the gap exists
From a policy standpoint, this imbalance is not surprising. Fairfax County is the state’s largest jurisdiction by population and income. With more than a million residents and a high concentration of professional employment, it generates a disproportionate share of Virginia’s tax base. By contrast, state aid formulas are designed to redistribute resources toward less wealthy localities, particularly in education, health, and social services. These formulas are meant to equalize opportunity across the commonwealth, ensuring that rural and lower-income areas are not left behind.
In other words, the fiscal gap reflects deliberate policy choices. Virginia’s school funding formula, for example, adjusts aid based on a locality’s “ability to pay,” which means that Fairfax receives less per student than almost any other jurisdiction. These policy decisions are defensible in principle, but they also come at a cost: the growing perception–supported by evidence–that Northern Virginia, and Fairfax in particular, serves as the commonwealth’s fiscal workhorse without receiving commensurate returns.
Policy implications
The Fairfax balance of payments analysis raises several important policy implications:
Sustainability of redistribution: A $2.5 billion annual net outflow is not a small sum. Over time, this structural imbalance could test the willingness of Fairfax residents to support state tax policies if they feel their contributions are not reinvested in their community.
Investment in growth engines: Fairfax and Northern Virginia are the state’s economic growth engines. State policies that underinvest in Fairfax County (and the Northern Virginia region more generally) risk undermining the very economic base that funds redistribution. Infrastructure, schools, and workforce investments in Fairfax are not just local benefits—they are essential to maintaining Virginia’s long-term competitiveness.
Transparency and accountability: Few Virginians outside policy circles are aware of the fiscal flows between localities and Richmond. Making these dynamics more transparent could foster a more informed debate about equity and efficiency in state-and-local fiscal relations.
Balancing equity and incentives: Redistribution is a core feature of state governance, but equity must be balanced with incentives. If wealthier localities like Fairfax are consistently shortchanged on state investments, it may weaken the sense of shared commonwealth that underpins Virginia’s governance model.
A question of fairness
Ultimately, the back-of-the-envelope calculation speaks for itself: Fairfax County most likely sends $2.5 billion more to Richmond than it gets back. (Personally, I look forward to seeing how my estimates compare to those prepared by the Weldon Cooper Center when they are released).
While some redistribution is both expected and justified in a state system, the scale of the imbalance raises a deeper concern. If one locality continually gives far more than it receives, while also shouldering the challenges of rapid growth, infrastructure stress, and service demands, then fairness becomes more than a rhetorical question—it becomes a matter of policy legitimacy.
The debate is not whether Fairfax should contribute to the broader commonwealth. It already does, generously and consistently. The question is whether the current fiscal arrangement fairly recognizes Fairfax’s needs as a community, its role as Virginia’s economic engine, and its right to a proportional return on the investments made by its taxpayers.
In the end, fiscal balance is not just about numbers. It is about whether the bonds of the commonwealth are strengthened or strained by the way resources are collected and redistributed. On that score, the current imbalance deserves careful scrutiny, thoughtful debate, and, ultimately, policy attention.
See the full computation here: Fairfax County Balance of Payments FY 2024. Excel file (22 kb).
