Tuesday is a big day in Loudoun County. It marks the official start of budget season for the county’s biggest expense, its public schools.
That afternoon, schools Superintendent Eric Williams will unveil his recommended budget plan for fiscal year 2019, which begins July 1. Williams’ presentation kicks off a four-month process where school leaders debate and finalize their list of expenses for next year, and then pitch it to the Board of Supervisors as a funding request. The county budget, including the school system’s share of that funding, will be finalized by April.
Williams and the school system’s budget office have offered a few hints at what will be in his proposed spending plan. The school system is projecting it could need as much as $106.2 million more next fiscal year to keep pace with enrollment growth, providing staffing to new school buildings and expand full-day kindergarten. Its operating budget for the current fiscal year is $1.24 billion.
Among the increased expenses, Williams is expected to earmark $14.04 million to provide raises for teachers. E. Leigh Burden, assistant superintendent of financial services, told the School Board last month that that money would provide a 2.9 percent raise, on average, to 6,611 teachers. The raises will be as little as $985 per year for the most veteran teachers to as much as $4,198 for mid-career teachers. After seeing that Loudoun pays its mid-career teachers less than neighboring jurisdictions, the School Board has worked for several years toward gradually making their pay more competitive.
Classified employees, those who do not have teaching licenses, may see traction in their request for raises. The Loudoun Education Association launched a campaign it called A Push for A Living Wage last month to advocate for raises for school support staff, such as custodians, teaching assistants and secretaries.
School Board member Tom Marshall (Leesburg), who chairs the board’s Human Resources and Talent Development Committee, said he’s open to supporting raises for classified employees, but he wants to first see what new expenses the schools will be facing next fiscal year before committing.
Health insurance premiums will also go up, for both the employees and the employer, Loudoun County Public Schools. Burden delivered this news to the School Board at its Dec. 12 meeting.
The school system brought in a consultant last year to look at its self-insurance fund. “Based on our costs, the consultants said prescription costs were increasing at about 14 percent and health care costs increasing at a lower rate than that,” Burden said. “So they recommended we increase premiums—for the employees and the employer—by 5.8 percent.”
Based on the current fiscal year budget adopted in April 2017, employees’ and the employer’s premium rate went up 2 percent on Jan. 1. If the School Board follows the superintendent’s recommendation, the 5.8 percent increase will take effect Jan. 1, 2019.
The School Board will likely make a few tweaks to Williams’ recommendation before adopting a final budget in February. From there, that document is sent over to the Board of Supervisors as a formal funding request.
To keep pace with new expenses, the School Board is hoping supervisors grant a hefty increase in local tax dollars.
The county’s budget outlook does look rosier as of this week, when supervisors received an update on higher-than-expected property values across Loudoun.
In October, supervisors voted narrowly to instruct County Administrator Tim Hemstreet to prepare a draft budget at the equalized real property tax rate—the rate at which the tax bill on the average home value stays at the same dollar figure despite increasing property values. They also directed Hemstreet to give them options to increase the budget to 1 cent above that rate.
At that time, real estate values were expected to appreciate less than 1 percent. That meant an equalized rate of $1.11 per $100 of assessed value, a penny and a half lower than the current rate, $1.125.
That also left the county facing a projected $95 million shortfall.
But new projections from the Commissioner of the Revenue show real estate property values grew by about 3 percent this year. With the average piece of property now worth more, the equalized rate is now $1.09, three and a half cents lower than this year’s rate.
It also means that at the current tax rate, the county is only $15.2 million short of paying for each of those projects plus a $92.2 million increase in funding for the schools. At $1.09, supervisors would have to cut $44 million.
Supervisors instructed Hemstreet to prepare a first draft at the budget at the new equalized tax rate, and to provide options to increase or decrease the budget enough to move the tax rate a penny in either direction.
Each penny on the tax rate is expected to bring in approximately $8.2 million in revenue next year.
When the School Board heard word recently that the county’s fiscal outlook is getting sunnier, Chairman Jeff Morse (Dulles) said he was happy to see the numbers moving in the right direction. He added, “I guess we’re still holding our breath.”
County staff members were scheduled to ask the Board of Supervisors for direction one last time Wednesday, Jan. 3, after this newspaper’s print deadline. The board was expected to either reinforce its earlier direction, keeping the county on track to budget at the new equalized rate, or take another direction based on the new revenue outlook. Read an update at LoudounNow.com.