Loudoun County's data center market continues to surge

Loudoun County staff are investigating how preliminary computer equipment taxes, which have been a source of revenue, is projected to be lower than previously forecasted.

A $24 million revenue shortfall is now forecasted for fiscal 2021, according to preliminary data from the Office of Commissioner of Revenue.

Staff, however, said at the April 13 finance committee meeting that they believe based on past trends there could be improvements to both the revenue and expenditure forecasts over the next few months. The committee was presented with the computer equipment taxes data along with the preliminary data on 2021 business personal property tax filings.

“We do have a lot of work that we're going to need to do with our partners like the ED [Economic Development] to understand what has occurred in the industry over the past year and what we can expect to occur in the industry over the upcoming year,” said Caleb Weitz, assistant director in the Department of Finance & Budget.

Weitz said one theory for the potential revenue shortfall is because only a couple of million square feet was outfitted with computer equipment. This was short of projections considering 6.4 million square feet was added to the tax rolls as of Jan. 1, 2021.

Weitz said the other theory could be due to the decline in the value per square feet for computer equipment.

“There is going to be a lot of data for staff to sort through over the next few months, assuming there's no major changes in the filings to understand what has happened with this levy,” Weitz said.

Buddy Rizer, executive director for Loudoun Economic Development, said he too was surprised by the projections. He added that much of the refresh [or upgrading the aging data centers] was placed on hold due to the COVID-19 pandemic.

Weitz said if the forecasts are correct, it would impact the upcoming fiscal 2022 budget.

The revenue forecast excludes any impact from the American Recovery Plan Act (ARPA) funds and the annual return of unspent funds from Loudoun County Public Schools (LCPS), the report said. Staff said both ARPA funds and the potential LCPS return are likely to have positive impacts for year-end available general fund balance.

$395 million was estimated to be available in the current fiscal year, according to county staff.

On April 6, the Board of Supervisors adopted the fiscal 2022 budget the real property tax rate of $0.980 per $100 in assessed value for fiscal 2022.

Board members expressed concern with the “unpredictable” revenue stream before adopting the fiscal 2022 budget.

Supervisor Caleb Kershner (R-Catoctin) said he hopes in the future to improve the forecasting process.

“I'm hoping that maybe from what we learn as we kind of crunch these numbers and figure this out, that we will probably have a little bit of better process in terms of doing this next year, because certainly we want to be as accurate as possible,” Kershner said. “I'd rather err on the side of undercutting it than over.”

Staff will continue to update the finance committee on a monthly basis on revenues and the projected year-end position for the county’s general fund.

(3) comments


The writing in this article is badly punctuated and not written well. It is disjointed and makes it difficult to read.


The projected surplus is now 17 million dollars instead of 41 million dollars. Sounds like a step in the correct direction. I thought we were supposed to be a balanced budget entity not a surplus slush fund for the BoS to do what they will with the money.


The surplus will be 24 million dollars smaller and what is wrong with that, ask Bob?

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