County supervisors have approved their next annual budget, setting up real estate owners for higher tax bills fueled by skyrocketing property assessments.
The new $0.89 per $100 real estate tax rate is a historic nine-cent reduction—but will still leave the average homeowner paying higher tax bills as values climb. For the homeowner with the average $636,200 residential property, the new tax rate will result in a tax bill about $200 higher.
Supervisors on Tuesday also approved a cut to the personal property tax for the first time since it was set at its current $4.20 per $100 of value rate in 1987—starting next year, that tax rate will go down five cents. That is hoped to address an over-reliance on data center revenues, which county budget officers have warned may be more volatile than real estate tax revenues, and the growth in other tax bills such as car tax bills.
They also earlier this year approved a proposal by Commissioner of the Revenue Robert S. Wertz to tax vehicles at only 80% of their assessed values as car assessments show historic increases.
Supervisors did not take advantage of a newly adopted state law that would have allowed them to set a different, lower tax rate for personal vehicles compared to other personal property—down to cutting out the local car tax entirely.
Much of supervisors’ cutting from the county budget came from new priorities introduced by supervisors, rather than from core county services. Those reductions include slowing the program to roll out body-worn cameras for Sheriff’s Office deputies, trimming the dedicated revenue source for affordable housing, and cutting staff support for collective bargaining with county employee unions.
Meanwhile, the budget also includes $15 million in base budget growth, 196 new positions, and a $19.1 million increase for government employee compensation including a 5% merit increase, a step increase for public safety employees, and salary scale and pay compression adjustments.
On top of that, the budget increases Loudoun County Public Schools funding by $53.7 million, partially funding a request from the school district that came as a surprise late in the county’s budget development work. The school division had requested $1.08 billion in funding from the county, a $75 million increase over last year. That also was a larger request than the school system had advised county staff to expect, and resulted in some county departments’ requests getting cut to make room for more school funding.
The growing school budget was the sticking point that led to a divided vote on the budget April 5. Supervisors voted to approve the spending plan on a 7-2 vote, with supervisors Tony R. Buffington (R-Blue Ridge) and Caleb E. Kershner (R-Catoctin) opposed.
“This is a tough year for our residents, our business owners, and I would have liked to have seen it on the LCPS side much lower than it was,” Buffington said.
Kershner said this year, “inflation is no joke.”
“This year, the taxes for every single homeowner in this county have gone up, and it’s really about real dollars,” Kershner said. He and Buffington said it didn’t seem the School Board put as much work into trimming their budget proposal, and pointed to spending outpacing student enrollment growth.
But other supervisors said investing in public schools is important.
“That is probably the most important part of our budget, because if we don’t educate the children they cannot grow up to be solid members of our community, and life will be very difficult for them,” said Supervisor Kristen C. Umstattd (D-Leesburg). “So, I don’t have any problem sending additional resources to the schools.”
Supervisor Matthew F. Letourneau (R-Dulles), the board’s longest-serving current member, pointed out the board has reduced the tax rate every year he has been on the board. But he also pointed out the constantly increasing spending on schools, including when measured on a per-student basis.
“With all this, I think you cannot argue that the board has not strongly supported public education in Loudoun for a long time,” he said.
Exactly how much the School Board will have to trim from its budget proposal remains to be seen; the General Assembly, the school district’s other major source of funding, still has not adopted a budget.
And Supervisor Michael R. Turner (D-Ashburn) predicted balancing real estate and personal property tax revenues in the future will only get more difficult.
“I think we did great work this year in basically holding where we are right now. I just want to point out that the downward pressure on that ratio is going to increase in subsequent years, and this is something we have to have a pretty serious philosophical discussion about going forward,” he said.