Loudoun County staff is preparing the fiscal 2021 proposed budget at the current real property rate of $1.045 per $100 in assessed value.
Under direction from the Loudoun County Board of Supervisors, the county administrator will also provide options to either increase the real property tax rate by one cent to $1.055 or decrease the real property tax rate by one cent to $1.035. For each penny increase in the tax rate, the average homeowner would see a $50 increase in their annual tax bill.
The motion was moved on a party-line vote with Republican supervisors Tony Buffington (Blue Ridge), Caleb Kershner (Catoctin) and Matthew Letourneau (Dulles) in opposition.
Given rising property assessments, keeping the tax rate level would effectively serve as a tax hike on county homeowners.
At the current tax rate of $1.045, county staff said the scenario would improve the county’s ability to maintain and, in some cases, expand service levels as well as provide capacity to address some new board initiatives.
First priority and some second priority departmental resource requests would be addressed, according to county staff. Additionally, the scenario would fund employee compensation increases, opening new facilities and operation and management base budget increases.
Letourneau, who serves as the board’s finance committee chairman, said his preference is to start as low as $1.03.
“This is not an outcome discussion. This is not a discussion about where the tax rate should be or what we should, should fund and shouldn't fund. It's really just how does the board want to do this. My preferred method is to start low and to add,” Letourneau said.
County Administrator Tim Hemstreet confirmed with Letourneau that at a rate of $1.03 maintenance increases, opening new facilities and the new classification and compensation structure would be covered.
However, the $1.03 rate would not cover departmental requests and the demand for services considering the growing population.
One of the most notable challenges for budget discussions is implementing a new classification and compensation structure for the county government, which is aimed at improving pay and compensation for county employees.
This initiative has an approximately $24 million impact to the county’s base budget in fiscal 2021, separate from the approximately $11 million to implement the new classification and compensation structure in the current 2020 budget.
Chairwoman Phyllis Randall (D-At Large) and a couple of her colleagues spoke in favor of moving forward with the classification and compensation study—not causing any further delay.
“Our employees have been paid below with the comparative counties have been paid for years,” Randall said. “And one thing I learned about this board when I came on last time is the board is a perpetual body, and to some degree – not for everything, but to some degree – what happens on one board has to be somewhat respected by another. So, if a board promises our county staff that they have well-deserved, well-needed … pay increases, then I would really object to a new board coming on and doing something different with that.”
Personnel and departmental operating budgets have increased along with Loudoun's population. Over the past three years, the county has added nearly 520 net new full-time equivalent positions.
Should the board raise the property tax rate, staff said it would result in additional revenue available for county needs and reduce the funding gap for the public school division, which could be around $20 million.
The budget is expected to be adopted in April.
“I think this is a reasonable recommendation from the staff to go with the current tax rate and I think it's reasonable to say if we can go down, let's go down, and hopefully we don't have to go up at all,” Randall said. “But to start at the current tax rate is a reasonable recommendation that the staff has given us, and I am not happy, but I am willing to go with their recommendation and hopefully be able to go down from there.”