$251 million shortfall projected; ambulance fee being considered
By Jason Jacks
Not that more evidence was needed, but the bad housing market continues to create havoc on local economies as Loudoun County officials said they are projecting a budget shortfall next year of $251 million.
The announcement came during a briefing of new members of the Board of Supervisors in Leesburg Dec. 12, where county officials said property values in Loudoun are forecasted to drop another 9 percent over the next two years. They decreased 10 percent from 2006 to 2007.
It's difficult to overstate the importance of real estate values on the county budget. In the budget adopted by supervisors last spring, taxes from real estate accounted for 72 percent of all county revenues, most of which is used to fund school projects and programs.
In November, the median home price in Loudoun was the lowest it's been in 2007 at $405,000 and the lowest since November 2004, according to the Dulles Area Association of Realtors.
In terms of foreclosures, the picture is just as bleak. A study by the George Mason University Center for Regional Analysis said 219 of every 10,000 owner-occupied homes in Loudoun were in foreclosure at the end of November, triple the region's average.
County Assessor Todd Kaufman said last month that property values are fluctuating throughout the county. He said the values of town house and condos have dropped but that land and commercial values "continue to accelerate."
Besides a sinking housing market, county officials also blame continued growth and increased school spending for the gloomy budget forecast.
"Right now, schools are not even in the right universe," said Board Chairman Scott York (I-at large), commenting on the school system's expected $801 million spending plan for next year.
School spending is projected to increase 17 percent next year. About 73 percent of all local tax money goes toward public schools.
Mark Adams, director of the Department of Management and Financial Services, said the county is looking at several ways to make up at least part of the lost revenue. One idea is to charge a fee for use of county ambulances, something supervisors had rejected in the past.
Expecting a bad budget picture, County Administrator Kirby Bowers said he told his department heads to keep their spending wish lists short for next year.
Public safety is asking to increase its spending by $19.5 million next year. Most of that, Bowers said, is needed for jail expansion and for the opening of a sheriff's substation in Sterling Park.
"A lot of what this county wants is not going to fly," said Supervisor Jim Burton (I-Blue Ridge).
Without spending cuts, Loudoun Budget Manager Ari Sky told supervisors a tax rate in the neighborhood of $1.24 of $100 of the assessed property value would be needed to eliminate a shortfall of $251 million. The current rate is 96 cents.
The board will adopt the budget for fiscal year 2009 in early April.
Contact the reporter at jjacks@timespapers.com