The Board of Supervisors has given County Administrator Tim Hemstreet his instructions for proposing the next annual county budget, which will likely see homeowners paying more on their real estate tax bills.
Loudouners are seeing two things pushing their tax bills up: a gulf between residential and commercial real estate appreciation, and a continually growing cost of government as the county itself continues to grow. Typically, commercial and residential real estate appreciate at similar rates; this year, however, the COVID-19 pandemic has ravaged commercial property values while residential real estate continues its climb. That has meant that the homeowners’ equalized tax rate—the tax rate at which the average property owner pays roughly the same dollar amount on their tax bill, despite changing property values—is lower than the overall equalized rate.
Today’s tax rate is $1.035 per $100 of assessed value; the current projection for the next equalized tax rate is $1.015 overall and would be $0.995 for homeowners. The report to county supervisors did not even contemplate a tax rate that low. According to the meeting item Jan. 5, at a tax rate of $1 per $100 of assessed value, a fraction of a center higher, the county would not generate enough funding for any county department requests and only a few Board of Supervisors initiatives.
Supervisors set Hemstreet to work preparing a budget rate at—$1.025. According to a staff report, the proposed rate would be an increase to the average homeowner’s bill over 2020 of $159.
The budget direction—to prepare a budget above the equalized rate, with options to raise or lower the tax rate by a cent—also marks a departure from how previous boards began their budget work. Historically, the board has begun work at the equalized rate, with options to go above or below. Starting from the county administrator’s proposed budget, supervisors then tweak the budget by picking and choosing among options for adding to and cutting from the budget.
Republican supervisors led by finance committee chairman Supervisor Matthew F. Letourneau (R-Dulles) pushed to start budget work in the traditional fashion, but were voted down along party lines.
“We are lowering the tax rate. The reason your property owners on average are going to pay more money is because their property values have gone up,” said Supervisor Michael R. Turner (D-Ashburn). “If you really want to lower their taxes, the absolute dollars of taxes, then I suggest you go out to your communities and do everything you can to lower the property values. You’ll be very popular.”
“We were elected to do things differently, first of all, and we’ve underfunded our county in the last couple decades,” said Supervisor Juli E. Briskman (D-Algonkian).
Supervisors voted down Letourneau’s motion to begin budget deliberations at the overall equalized rate, and in favor of beginning at $1.025, along party lines.
Under the current revenue estimates, each cent of the real property tax rate is worth $9,735,000. Hemstreet will bring supervisors a budget that includes funding for several board initiatives including expanding the Sheriff’s Office’s body-worn camera program, expanding the drug court, and funding to allow the county government to being collective bargaining with employee unions.