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County supervisors will face slimmer revenues and slowed growth while homeowners may see higher real estate tax bills in the next county budget, county staff members have warned.

Twelve days into Fiscal Year 2023, on July 12 the Board of Supervisors’ finance committee heard the first public report on preparations for the Fiscal Year 2024 budget.

County Administrator Tim Hemstreet said, while revenue projections this far in advance are very broad, the county budget staff can already tell the next annual budget is going to be much more difficult.

“This far out, our numbers, I can tell you right now, are off by $30 or $40 million. So the numbers are going to get better as we get into October, December, but they’re not going to get better enough that we would be looking at being able to accomplish the things this board has become accustomed to at the equalized rate or something close to the equalized rate,” he said.

Hemstreet said supervisors will face budget challenges “that really boards have not seen for seven, eight, nine years.”

That will have implications for real estate tax bills. That tax rate is the main tool the board uses to adjust its revenues as home values, business revenues and other sources of local tax revenue fluctuate.

Residential property is not expected to continue growing in value at the rate it has been, meaning less growth in that tax base.

Loudoun’s economic recovery from the pandemic is strong, albeit uneven as industries like hospitality and travel are recovering more slowly. Meanwhile, the taxpayer’s dollar may not go as far amid continuing high inflation.

Parks and recreation and Loudoun Transit will be updating supervisors as their revenues stabilize from pandemic disruptions.

Supervisors are also discussing whether to fund schools differently in the future, such as by giving the school system a set percentage of local tax funding.

And especially impactful for Loudoun, the General Assembly this year passed legislation regulating the methods local governments use to assess data center real estate. County staff members said they expect that will mean those assessed—as opposed to market—values drop, bringing in less local tax revenue. Those declines could be offset as more data centers are built and come online.

On the other side of data center revenue—the property taxes on the computer equipment inside the buildings—the county staff expects supply chain disruptions could continue to slow replacements to those server racks, meaning older, less-valuable equipment being taxed.

Hemstreet said the board will be looking at tax increases if it wants to continue growing the county government at the rate it has been.

“To get a budget similar to what you’re used to, we think, is looking at an increase of probably around 7 pennies,” Hemstreet said. That would bump the real estate tax rate up from the current $0.89 per $100 of assessed value up to $0.96 per $100. The current estimated equalized rate, the rate at which the average real estate owner’s tax bill stays the same despite increasing property value, would be a three-and-a-half cent cut to $0.855 per $100.

“We’re really talking about slowing the rate of growth,” Hemstreest said. “We do not have a scenario, even at the equalized rate, where we believe that we will be laying people off or having to do something like that.”

During the briefing, Committee Chairwoman Kristen C. Umstattd (D-Leesburg) said she would favor going no higher than the current tax rate.

“I personally cannot imagine going up to 96 cents,” she said.

Supervisor Matthew F. Letourneau (R-Dulles) said it was a “bleak report,” and that he had concerns about the direction of the economy.

“I think we need to prepare as if we are heading into a time of more scarcity, in which we will not have tens of millions to play with of new revenue,” he said.

“I think we, as a county, need to assume we are going into a recession,” Supervisor Caleb E. Kershner (R-Catoctin) said.

The committee meeting July 12 kicked off the public process for budget preparations that typically ends with a vote on a budget in early April. SHARE ONWhatsAppFacebookTwitterLinkedInGoogle+Pin ItEmailBuffer Related

The board ought to begin an aggressive campaign to identify wasteful spending across the county and start proposing permanent reductions in spending. Of course, we know none of these politicians will do that and will go on to raise tax rates and fund more wasteful projects like sports palaces and metro lines to nowhere.

The board is out of touch with reality and simply out of their element when it comes to dealing with fiscal issues. It’s time for county residents to find a new kind of supervisor who is concerned with preserving liberty in Loudoun rather than spending every dime they can coerce from residents through outrageous tax rates. We can’t afford the government they envision. No one can.

We don’t need to raise taxes in a hyper-inflationary environment. The Board needs to CUT THE SCHOOL BUDGET. That is the 800lb gorilla that the Board has been giving a blank check for years. Enrollment increases, and LCPS gets a budget increase. Enrollment craters, and LCPS gets a budget increase.

Stop over funding the schools!

The supervisors tend to spend other folks’ money as if there’s no tomorrow. But times are tough. I think Loudoun County needs an austerity budget. Please stop with all these frills. Salaries for county workers (with benefits factored in) are outrageous. All of this nonsense needs to be cut back. Happy Summer Loudoun!

Instead of causing more harm to the residents of Loudoun, by raising their property tax, the democratic led BoS needs to put a STOP to their pet projects that no one asked for. The BoS talks about needing more options for affordable housing in this county. Well, raising property taxes won’t help. In fact, it will cause people to vacate the county to live elsewhere that is cheaper given that many jobs offer remote as an option.

Where is all this tax revenue from the data centers that has made county ugly gone? What is the BoS spending all of this money on?

It’s really time for the BoS to go back to the drawing board and cut all future spending that is not critical to the county while ensuring that our taxes DO NOT go up any more. Maybe we can start by nixing the change of highway/road names. Maybe we can cut the school system budget so that they are not wasting money on projects, such as changing a school name, that have nothing to do with educating our kids. Maybe we can make sure these data centers are actually paying their fair share that they sold you on. And if not, maybe stop approving more development. How about just STOP SPENDING!

The economy has been slowing for a while. The BOS needs to learn you can’t spend everything that comes in, you must set aside for when the economy gets tight, that is what a business does as well as many households. Will they our BOS ever learn?

Believe me, I think this county will be headed into a recession soon. It seems to be evident across the country, but this county seems to have over leveraged itself and didn’t invest in smart growth strategies while times were good. These smart growth strategies could’ve brought attention to the eastern side of Loudoun from an increasingly upwardly mobile tax base and it could’ve helped preserve more of western Loudoun.

Oh well, I guess they have data centers, that is better than nothing, not an optimal growth strategy though.

Any and all new projects funded with Federal dollars intended for pandemic relief during the pandemic that aren’t sustainable without increasing Loudoun taxes or fees need to be cancelled. There hasn’t been a line by line accountability by the county what the Federal dollars have been spent on in Loudoun. This needs to happen now.

Non-profits like hospitals are NOT charities do please charge them the 28% of the property tax rate as allowed under statute. Force LCPS to follow it’s controlling statute 22.1-79 and operate UTMOST EFFICIENTLY. Stop waiving property tax for Howard Hughes! Stop only assessing the Greenway at less than half of its value as proven by its recent re-financing! Stop ignoring the real impact of high density residential development! Do these things and you stop having a shortfall. 🙂

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