Loudoun Leaders: Metro Payments Plan Still On Track

County budget, transportation, and administration staff members report that Loudoun is still on target to cover the cost for Metrorail, contradicting a concern raised by developers.

Some developers have warned that the special tax districts created around the future Metro stations will not generate enough revenue unless supervisors permit more mixed-use residential than is already planned, instead of strictly commercial uses like data centers.

But Supervisor Matthew F. Letourneau (R-Dulles), who chairs the board’s finance committee, asked the county staff the 297-million-dollar question:

“Based on how the tax district’s performing to this point, does staff see a need to deviate from the land use policies that the board had previously adopted?”

The answer from county administration: Stay the course. It’s all on rails.

At the moment, the county expects to pay about $274 million for the Silver Line extension construction, which it is paying for with loans and revenues from the Metro Service Tax District. Property owners in the district pay an additional tax of 20 cents per $100 of assessed value on top of their regular county tax.

As part of its agreement to get metro service into Loudoun, the county also agreed to shoulder a share of the system’s operating and capital costs, estimated at a total annual contribution of about $22.9 million. The county plans to pay for operating expenses through a combination of the Metro Service Tax District; two smaller tax districts around the Ashburn and Loudoun Gateway stations, which currently levy no tax; the revenue from the local 2 percent gasoline sales tax; and an anticipated growth in the county general fund as property values around the metro stations continue to outpace other property in the county.

Supervisors have not yet made a final decision on how the county will pay for its share of capital costs, such as the cost of introducing metro’s new 7000-series rail cars. But to keep its options open, the board has allowed for $25 million in debt financing in the county capital budget from 2019 to 2022.

The county expects to start paying operating costs when Metro opens in 2020, and capital costs 18 months before the service starts.

The county has encountered some stumbling blocks in paying for metro. The local gasoline tax is bringing in less than the county anticipated because of an unexpected drop in prices, and an 18-month delay in construction may end up costing the county more. On the other hand, county staff members say these short-term bumps in the road shouldn’t be measured against the county’s long-term forecasts.

“There is a fiscal benefit to Loudoun from metro coming here, and this benefit should be realized over time through things like employment growth, development around the stations, increased property values and higher densities,” Management and Budget Director Erin McLellan said.

Gasoline prices, she pointed out, are expected to rebound, and property value assessments in the Metrorail Service Tax District have increased by more than 40 percent since 2013, compared to 20 percent over the entire county. And while the delay in opening metro may end up costing the county more, it also gives the metro tax district more time to generate revenue before the county starts paying operating and capital costs.

“To be perfectly blunt, I was asking if we need to put residential in LDN65 [the loudest area around the current and future runways at Dulles airport] as has been suggested by certain developers, who say that we need to do it for the benefit of our tax district,” Letourneau said. That answer, according to Letourneau and county planners, was no.

County staff members say they will continue to monitor metro’s financial impact in the county by keeping an eye on tax district revenue, the rate of commercial growth around metro stations, and the real estate premium paid to build, live, and work near the rail stations.



One thought on “Loudoun Leaders: Metro Payments Plan Still On Track

  • 2016-09-28 at 1:12 pm

    This one ain’t rocket science. Why are developers saying the county can’t cover the metro costs?

    1. Developers will find any excuse in the book for more housing. That cheap, easy money is like crack cocaine to developers. They can’t ever get enough.
    2. From the article, “..property value assessments in the Metrorail Service Tax District have increased by more than 40 percent since 2013.” Developers are paying more in property taxes and they want more people in the tax districts so their taxes go down.

    More housing is a win-win for the lying, evil, greedy, slimy, no-good developers. They make a quick buck off the houses and have more property owners to share the metro tax burden and lower their own tax bills.

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