Hemstreet Recommends Tax Increase to Meet School, County Needs

County Administrator Tim Hemstreet recommends Loudoun hike its taxes to keep up with the demand on Virginia’s fastest growing locality.

Hemstreet today presented a proposed $2.5 billion fiscal year 2017 budget that could be funded without raising the real estate tax rate, but warned it just doesn’t bring in enough revenue to cover county services.

County supervisors had instructed Hemstreet to base his budget on the equalized tax rate, in an effort to keep residents’ tax bills level. After projections varied wildly through the year, the equalized tax rate—the tax rate that gives the average taxpayer the same dollar figure on her tax bill this year as last—has settled on exactly the same number as the current tax rate, $1.135.

Hemstreet hastened to point out that the equalized tax rate to homeowners is in fact $1.14, because average home values across the county have dropped slightly. The county’s real property appreciated by only about 0.2 percent this year, as compared to 2 percent and 4 percent in the two previous years.

Hemstreet warned that the equalized tax rate would not provide enough revenue to maintain Loudoun’s current level of service as the population continues to grow. His equalized tax rate budget protects pay and benefits for county employees, but has no room for expanding facilities in the county, and falls short of some of the county’s mandates. It also increases local tax funding for the school system by $26.9 million—$31.4 million short of the School Board’s request.

“Doing more with less was a theme throughout,” Hemstreet said.

Hemstreet’s recommended budget includes $1.14 and $1.15 tax rates. He said the $1.14 rate would  provide adequate staffing at all county facilities and protect public safety and social safety net services. It also accelerates funding for one elementary school, two middle schools, and one high school in the Capital Improvement Program to alleviate overcrowding in the Dulles North and Dulles South areas.

Adding a penny more to the tax rate would allow supervisors to transfer an additional $10.8 million to the schools, although that figure still falls short of the School Board’s request by $20.7 million.

To fully fund the School Board’s request, the tax rate would have to climb to $1.17. Hemstreet advertised at this rate to give supervisors options—the county cannot impose a tax rate higher than what it has already advertised.

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