Supervisors Talk COVID, Budget at Loudoun Chamber Forum

Board of Supervisors leaders had the annual budget talks in the month ahead top of mind during a virtual breakfast meeting with the Loudoun County Chamber of Commerce on Thursday, Feb. 18.

Three county supervisors took part in the Chamber’s annual breakfast meeting with the county board, part of its PolicyMakers series: finance committee Chairman Matthew F. Letourneau (R-Dulles), Transportation and Land Use Committee Chairman Michael R. Turner (D-Ashburn), and County Chair Phyllis J. Randall (D-At Large). They met with the chamber only a few days before the first public hearing on the next annual county budget, scheduled Tuesday afternoon, and in a year when the COVID-19 pandemic has complicated that discussion.

“Our folks really have come together, and in a way, as the county administrator says, we’re almost running two different operations: we’re running our normal county government, and then we have a whole separate COVID-19 operation,” Letourneau said.

The pandemic has shown the divides in the county’s prosperity. While tourism and hospitality businesses have been hit hard, data centers have flourished even more. While commercial property values have largely sunk, the cost of residential real estate in Loudoun continues to climb. And for the county government, all of that impacts tax revenues.

Supervisors pointed to a concern that has been raised in years past, and only become more obvious during the pandemic—the scale of the data center industry’s tax revenues, which this year comprise fully a third of local tax revenues, enough to cover all of the county government’s operational costs other than schools.

“That does concern us a little bit because you just don’t want to be that reliant on one particular source of revenue,” Letourneau said. “So obviously, diversifying our economy, continuing to bring in businesses of all stripes, whether that’s aerospace or biomedical or others, is going to be very important. But we also may need to look at some of the ways that our tax policy is set up overall to try to address those issues.”

He suggested using some of that windfall for one-time expenses in the county’s Capital Improvement Program, so that if data center tax revenues start to dry up the county doesn’t come up short on continuing expenses like payroll. Supervisors have already in years past used a similar strategy to mitigate that risk.

The difference in commercial and residential property values also presents a challenge by putting more of the tax burden on homeowners as their property values climb—even as some have seen their incomes shrink. Supervisors offered different takes on how to decide how much those people should pay.

“I’m not sure this is the year to necessarily undertake major new expenditures on things that are going to drive the tax rate higher,” Letourneau said.

“I approach every budget cycle as, what do we need to provide effective services to our constituents at the lowest possible tax rate, whatever that tax rate might come out to be,” Randall said.

The committee chairs also offered chamber members a glance at what they’re working on in the longer term. Letourneau mentioned the problem of funding large transportation projects on major routes, pointing to plans for Loudoun County Parkway and Rt. 50 interchange.

“That particular project is several hundred million dollars, and one of our challenges is, just how does a locality like ours fund something like that that’s just so big?” Letourneau said. “And it’s pretty clear we’re going to need the state’s help with that, but the state system, which is called SMART SCALE, is just not set up to really address those type of issues.”

No Virginia system is; while the county is planning the project, which is still more than six years away and estimated to cost a half-billion dollars, roads are nominally a state responsibility. Transportation projects are the largest category of spending in the county’s capital program as the county board has sought to alleviate traffic in the face in state inaction.

And Turner pointed to his committee’s work on a collection of land preservation programs, including Purchase of Development Rights, Transfer of Development Rights. The transfer program, which would see developers in one area buying development rights off of land in other areas, he said, was proven infeasible and expensive.

“Additionally, with the rewrite of the 2019 [comprehensive] plan, we largely already gave away our density in the east,” Turner said.

However, the PDR program, which would see the government paying landowners for their development rights and retiring those rights, is still under development. It’s also a program that Loudoun County has used before, Turner pointed out, and one that may still have new possibilities.

“One of the things we might be able to do with the PDR program is allow small landowners—it usually requires 40 acres to do a PDR and make it cost effective—allow smaller landowners to do conservation easements, and then use PDR funding to pay for the process of obtaining the conservation easement, and possibly also step up their tax benefit from the conservation easement to market value, so that it becomes irrelevant whether they develop or just put their land in a conservation easement using PDR funds,” Turner said.

And Randall urged attendees to help get the word out about Loudoun businesses, which have gone to great lengths to weather the pandemic and keep shopping and dining safe. She pointed in particular to retail and dining businesses.

“They’re already used to having to follow all those safety guidelines, but we’re not doing a great job putting that out,” Randall said. “And so if I would say one thing to everybody in the Chamber, everybody listening to my voice right now: one, go out and support these businesses right now. Go out, and if you can tip, tip heavy. But also, help us through your social media, through your newsletters, through whatever you might put out to say that our restaurant industry, our hotel industry, our touch industry overall really is doing over and above all that is required.”

3 thoughts on “Supervisors Talk COVID, Budget at Loudoun Chamber Forum

  • 2021-02-18 at 4:12 pm

    “Additionally, with the rewrite of the 2019 [comprehensive] plan, we largely already gave away our density in the east,” Turner said”

    Way to go LoCo — give away your negotiating tool right at the start.

  • 2021-02-18 at 11:45 pm

    If the BoS is concerned about paying the bills and affording new infrastructure, then stop trying to get people to come to LoCo for a year or so. Also, despite the value of the commercial land itself, it appears that data center revenue is exploding so instead of focusing on current value, focus on how much cash is available. Stop doing anything that is ‘nice to do’ and focus on ‘necessary to do’ such as fund the Sheriff’s office, fire department, hazmat, and similar things that “ensure domestic tranquility.” The LoCo BoS doesn’t have to provide for the common defense unless you count the LCSO but that is a domestic tranquility item. Fix existing roads so they are safe to drive on and do a deep dive to prioritize future projects so the maximum number of county residents benefit, not just certain neighborhoods. Is there any legal reason why LoCo couldn’t offer to sell all of the county east of 28 to Fairfax County? This would make 28 the boundary and that would be nice and clean as opposed to that diagonal line which confuses some folks as to which county they live in. Also, the BoS needs to focus more on bringing in industry and businesses that generate revenue. I know they are working hard given the challenges of C-19 but I wish they would stop doing stuff that it is not going to generate revenue such as this weapons ban on county property. That ban won’t generate revenue so during this C-19 crisis, don’t spend one minute on it or anything like that. Unless something is constitutionally mandated or is going to bring in business/industry that will generate revenue, stop doing it for 12 months and get a solid grip on LoCo’s situation. Delay these developers for a minimum of 12-24 months because new housing adds to the infrastructure burden and leads to serious overcrowding which is what we are starting to see all over the county. I know the BoS can do what they need to do if they would just kick all of that other stuff to the curb for 18-24 months and focus on the county’s solvency.

  • 2021-02-19 at 1:57 pm

    This might be the biggest lie Randall has ever told: “I approach every budget cycle as, what do we need to provide effective services to our constituents at the lowest possible tax rate, whatever that tax rate might come out to be”.

    Loudoun has $190M (+10%) in additional revenues from the datacenters alone. That could generate a $700 refund to every household in Loudoun. Yet, Randall and Letourneau are only too eager to squander ALL of that on bureaucrats and then unbelievabley raise taxes to spend even more.

    Congrats to Letourneau who gets the “Nancy Pelosi Disciple of the Year” award. I think this is his 5th straight year winning the award.

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