Loudoun Budget Talks Begin with $57M Shortfall

It’s budget season again in Loudoun.

The Board of Supervisors has instructed the county staff to prepare a fiscal year 2018 budget at the current real property tax rate of $1.145 per $100 of assessed value, and to provide the board options for lowering that rate.

That is the board’s usual direction. Each year, the supervisors direct the staff to look for options for an estimated equalized tax rate, which would cancel out property value growth on the average Loudouner’s tax bill by lowering the tax rate. Last year, that process was upside down—property values shrunk, and the equalized tax rate was higher than the previous year’s tax rate. Supervisors last year added a penny to the tax rate.

This year, the county budget office estimates the county will again face a funding shortfall. At the current tax rate, preliminary projections show the county falling $56.7 million short without making cuts. Property and other local taxes won’t keep up with increases in school needs and population growth.

The county will have some leftover funding from this year to put toward that budget gap next year, but not as much as in years past.

“Given the amount of fund balance we’ll have this year, which will be somewhere in the neighborhood of $30 to $35 million, perhaps that will help us close this gap,” said Supervisor Matthew F. Letourneau (R-Dulles). Last year, the county had about $63 million in fund balance, said Department of Management and Budget Director Erin McLellan.

County Administrator Tim Hemstreet also pointed out that the board has targeted several projects for potential funding from the surplus, possibly cutting further into this year’s extra cash. Those include installing more synthetic turf fields at high schools, paying some comprehensive plan review expenses, conducting an employee class and compensation study, and consolidating the county’s three emergency communication departments.

When the board was voting on current previous budget in March, the School Board said it wanted four additional artificial turf fields at an estimated cost of $1.1 million each. The deferred costs of the comprehensive plan review—for which the board has already set aside $600,000 this year—were estimated at $400,000. A classification and compensation study to update the county’s pay scale was estimated at $200,000. The cost to consolidate emergency communications into one Office of Emergency Management under the Department of Fire, Rescue, and Emergency Management was estimated at $150,000.

Overall, those expenses could add up to $5.15 million. The board will consider those again in December or January.

The county will also study reducing the personal property tax rate on computers to help the county retain its data centers.

“Some of our competing jurisdictions have lowered their property tax rate, and Mr. [Department of Economic Development Director Buddy] Rizer is beginning to hear some complaints about that,” Letourneau said. “The nature of this industry is such that the data centers have to refresh every few years, because their equipment gets out of date, so it’s actually easier for them to move.” Letourneau said even though the data centers invest in the building themselves, “the real money is inside.”

The board also again restated its position that if it takes on more than the 70 percent it now pays toward Leesburg’s school resource officers, those positions then would be filled by Loudoun deputies instead of town officers. The Leesburg Town Council wants the county to cover up to 100 percent of the cost of the SROs in town.

Supervisor Suzanne M. Volpe (R-Algonkian) also asked the county staff to refer background information on the condition of the state, national, and world economy to the school board.

Hemstreet is expected to present his proposed budget in February.

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