After the county budget staff and supervisors first expected a lower tax rate, then revised that to a constant tax rate, County Administrator Tim Hemstreet has now proposed a one-cent tax rate cut as a starting point for the FY 2021 budget deliberations.
Hemstreet in January asked supervisors to revise their instruction to him upward, from writing a budget based on the equalized real estate tax rate—at which the average tax bill would stay the same—to the current tax rate, which, with growing real estate values, would mean the average taxpayer saw their bill go up.
But on Wednesday, Hemstreet proposed a $3.024 billion budget based a one-cent real estate tax rate cut, to $1.035 per $100 of assessed value. The real estate tax rate is the county’s primary revenue source.
Hemstreet attributed that proposed tax cut to “positive shifts” in the county’s revenue projections since the January vote, bringing in an expected additional $15.5 million in revenues.
HIs proposal will still see the average real estate tax bill go up—the equalized rate overall this year is projected at $1.01, and the homeowners’ equalized rate at $1.015.
Hemstreet said the county’s budget growth this year is driven by the effort to update its employees’ job descriptions and pay scales, including catching their salaries up with other Northern Virginia jurisdictions; more money spent on capital projects and debt; and the cost of hiring hundreds of new employees in recent years.
In particular, Hemstreet said, the county needs somewhere to put all those hires. The county is in the midst of plans to open up more office space, and Hemstreet said the county’s most recognizable office, the government center in the heart of downtown Leesburg, is so full that parking has been rearranged in the parking garage. Hemstreet’s budget proposed another 150 positions across 25 departments.
The new employee payscales and raises, which take effect next month, are expected to cost $37.2 million. County Chairwoman Phyllis J. Randall (D-At Large) again assured county employees that the board is likely to go ahead with those raises—”I have not heard anyone say that they don’t want to fulfill the [compensation and classification] study.”
The proposed budget leaves a $2.5 million gap in the School Board’s budget request. The county’s funding for schools is increased by more than $75 million.
Hemstreet has advertised a real property tax rate of $1.045, giving supervisors flexibility add more spending to his recommended budget. Under state public notice requirements, supervisors this year can go no higher without needing to issue a new public notice, delaying the budget process.
Hemstreet, as is the common practice in Loudoun, also provided supervisors with priorities to add to the budget if the tax rate is increased, and cuts if the tax rate is decreased.
This is also the first year that the county expects to start paying out Loudoun’s operational funding for the Washington Metropolitan Area Transit Authority, funded in Loudoun by the local gas tax, when the Silver Line is planned to begin running in Loudoun in Fiscal Year 2021. Loudoun has already been banking gas tax revenues into a fund anticipating that opening.
Fiscal Year 2021 begins July 1, 2020.
The proposed budget is available online at loudoun.gov/budget.
The first budget public hearings will be at 3 p.m. and 6 p.m. on Tuesday, Feb. 25 at the government center in Leesburg, 1 Harrison Street. Another public hearing will be held Saturday, Feb. 29 at 9 a.m. at the Loudoun County Public Schools administration building in Broadlands, 21000 Education Court.
Comment is also accepted by email at firstname.lastname@example.org, or to the Board of Superivsors comment line at 703-777-0115.