The Loudoun County Board of Supervisors directed county staff early Wednesday morning to prepare the fiscal 2023 proposed budget around a real property tax rate scenario of $0.94, which is at an estimated equalized rate of $0.89.
The current real property tax rate is $0.980.
At the rate of $0.94 per $100 in assessed value, the average homeowner’s bill would increase by $291 for homeowners to $5,732, according to county staff.
Additionally, the motion included starting at the personal property tax rate of $4.20 per $100 of assessed value for tax year 2022 and $4.15 for tax year 2023, and for staff to provide options that would keep the personal property tax rate of $4.20 unchanged for tax year 2023.
The county administrator was also directed to program one-half cent of the real property tax rate as a dedicated revenue source to affordable housing needs — estimated to generate $5.6 million —prior to splitting new local tax funding between the county government and the school system budgets.
Chairwoman Phyllis Randall (D-At Large) said the board has generally driven the tax rate down every year for the past decade to the equalized rate. She said in the process, the action has helped to fund an aggressive capital budget and increase the county government and school division operating budgets from growth in both the real property and personal property portfolios. One example is the unprecedented growth of the data center industry resulting in a rapid increase of revenue growth, according to a Oct. 12 staff report
But while the board’s tax policy has provided consistent real property tax bills for taxpayers, a county staff report said Loudoun’s budget has not benefitted from the strong revaluation of its real property portfolio.
“There are many reasons why we are in this fix right now—t,” Randall said.” The funny thing is that no matter how much we actually put it at the equalized or below equalized tax rate, we’re still accused of raising taxes.”
Under the guidance, the real property tax rate would increase, while decreasing taxes on personal property, which include items such as vehicles and computer equipment in data centers, and other taxable property including vehicles for fiscal year 2023.
Supervisor Kristen Umstattd (D-Leesburg) urged the board to be careful and not impose additional tax burdens on the working, middle and lower classes.
“I think we need to be mindful, the real estate tax rate recommended is a significant drop from where it is now, even though it’s above the equalized rate, but I think we always need to be mindful of all these factors as we go forward,” she said.
The board’s finance committee also requested county staff maintain that at least 51.5% of the total General Fund taxes be generated from the real property tax rate by lowering the personal property tax as needed.
Residential property values have continued to strengthen, according to county staff, but the value of computer equipment, which they county has relied on for revenue, has become unpredictable.
Randall said the assessment information is preliminary and is subject to change next month. The board will vote on the final budget in April.
She said she hopes to have the tax rates as low as possible while maintaining county services.
Supervisor Matt Letourneau (R-Dulles), who serves as the chair of the finance committee, said the county has had enough growth in revenue to cover the increases until this past year. He pointed out that the staff report indicated residential development has slowed down, but expects an increase in the next couple of years with approved development projects.
However, he said the county will eventually run out of available land.
Letourneau said he would not support the motion, instead preferring other tax rate scenarios and how that impacts the board’s policies, which the board has done over the past six to seven years.
“I’m not saying I wouldn’t support the [staff] guidance that’s being put tonight, but what I want to know is what are the first five things the administrator would take out, if he had to,” Letourneau said.