Supervisors Eye Higher Homeowner Taxes, Cuts for Data Centers

Homeowners could see their taxes go up and data centers could get a tax break next year as Loudoun supervisors wrestle with a tight budget year and concerns about an over-reliance on data center revenues.

The board’s finance committee has recommended directing County Administrator Tim Hemstreet to propose a budget based on a real estate tax rate five cents above the equalized tax rate at which the average real estate tax bill is the same dollar amount despite climbing property values. And it also directed him to plan for a five-cent cut in the county’s personal property tax rate, currently $4.20 per $100 of assessed value, in 2023.

That would be the first rate change since 1987 to the tax that affects both residents’ possessions like cars, campers and boats as well as businesses’ assets like the computer equipment inside data centers, the major source of data center revenue. And county budget staff members have warned for years that the county is becoming too reliant on that revenue, which now accounts for roughly a third of the county’s local tax revenues. They have advised supervisors that most Virginia counties get most of their revenues from real estate taxes, which are considered a more stable source of revenue than business taxes. And they are recommending supervisors not allow real estate taxes to shrink smaller than 51.5% of the county’s revenues, where it is now.

And estimates for construction and new growth, drivers of county revenue growth outside of tax increases, suggest that the equalized rate will not be enough to fund the county government’s needs, according to the budget staff.

Preliminary figures suggest that budget will mean a $291 annual real estate tax bill increase, to $5,732, on the average home assessment of $609,800.

The county’s real estate portfolio projections remain very much in flux. Between the Thursday before the meeting, when the county published meeting materials, and the actual five days later, the projected equalized rate dropped five cents based on new information from the Commissioner of the Revenue, indicating stronger growth in property values.

The final assessment figures from that office will be published in January.

“I think the numbers are going to keep moving all the way into January,” Hemstreet said. “What we haven’t seen any movement on is the amount of dollars of new construction, which is what would change that relative five penny [increase over the equalized rate] number.”

And a half-cent of the county’s tax rate is likely to be taken out of the picture for the general operating budget, being directed instead to the county’s Housing Trust Fund.

Finance committee Chairman Matthew F. Letourneau (R-Dulles) pushed for more aggressive cuts to personal property taxes.

“We’re really not changing those percentages much, so if there’s a way to accelerate that and still fund just about everything we would want to fund, I think that would be a better thing to do if we can do it,” he said.

The finance committee voted 3-2 to send that recommendation to the full Board of Supervisors, with Letourneau and Supervisor Caleb E. Kershner (R-Catoctin) opposed. The Board of Supervisors will take it up Dec. 7.

22 thoughts on “Supervisors Eye Higher Homeowner Taxes, Cuts for Data Centers

  • 2021-11-19 at 10:52 am
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    This is a very delicate issue. Nobody wants higher taxes, especially during a health crisis. I totally see Supervisor Letourneau’s point about cutting personal-property taxes. Unfortunately, Virginia soon will have a governor who’s played fast & loose with the tax code for his personal benefit. He’s set a horrible example for his fellow Virginians. Bottom line: Everyone should pay their fair share. I can only hope the supervisors come up with an equitable solution. Happy Holidays Loudoun!

    • 2021-11-19 at 4:44 pm
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      Tim, clearly you miss the point. The data centers should pay more not the residents and the BoS should look for ways to reduce expenditures. When you run a business and/oe a household you can’t keep increasing your revenue you have to balance your budget. Not to mention the inflation under the current Federal Government is causing rising expenditures. If you truly believe what you say you should offer to pay more than your share.

    • 2021-11-19 at 4:54 pm
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      What is the definition of “Everyone should pay their fair share?”

      If you are within the Law then you are paying your fair share as set by the Tax Code.

    • 2021-11-19 at 5:41 pm
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      Tim – you are a complete clown show. To say the is a result of a governor who hasn’t eventaken office yet is a complete lack of common sense. You’re failure to address the cuts to data centers exposes you’re one way thought process. To not even address the many pet projects of the BOS and other Cty agencies is blindness.

      I weep for your lack of understanding and foolishness on this matter.

    • 2021-11-19 at 6:00 pm
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      Soooooo…….tired of hearing “pay your fair share” whenever someone wants to take more of your money.
      The democrat BOS has no clue about fiscal responsibility and is only making the bloated county government worse with government employee collective bargaining and getting into the real estate welfare business with affordable housing boondoggles.
      Vote these dopes out before they turn Loudoun into New Jersey.

  • 2021-11-19 at 11:27 am
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    It is not that the property owner is not paying enough taxes it isn’t even that the data centers aren’t pay their taxes it is the school board spending to much of the budget.

  • 2021-11-19 at 11:30 am
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    Where does the County think the Data Centers are going to go?? They are not just going to up and leave for cheaper pastures, Ashburn is an internet Trunk. The lag is almost 0. That’s why they came here in the first place. I’d say data centers are more stable than Residential!

    • 2021-11-19 at 6:34 pm
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      Good grief! Maybe if they stopped buying so many properties and worrying about rectifying Civil War inequities our generation has nothing to do with,i.e.all the cemeteries that the NAACP has plenty of $ to deal with them…this area is out if control. I own my condo and that is the only reason I’m still here as I qualify for tax relief ( which,by the way, is waaaaay too liberal).
      The data centers will NOT pick up their marbles and move so groveling to them and reducing their taxes is a direct affront to all the hard working people in this county. Yes, their are some very well off folks here, old and new money but the majority are trying to stay above water and sucking the life out of everyone to buy up “historic” sites or preserve space is often counter productive. As well as all the new development that strains the infrastructures…moratorium on building! People who want to move here will have to wait til something opens up .
      We can’t just keep building and building!

  • 2021-11-19 at 11:49 am
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    Good to see the board is consistent with plans to stick it to the residents of Loudoun County. The correct decision would have been to look for ways to reduce government spending and tighten budgets. But we aren’t likely to see that.

    The good people of Loudoun are NOT ATMs who can be raided for every ill-conceived ideological whim that attracts the fancy of the board. Remember this at election time. We need to restore some sanity to the county board.

  • 2021-11-19 at 1:33 pm
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    Think of all the cemeteries and broken down taverns Harrison Street can buy.

    Sicking it to Loudoun families. Who could have seen this coming?

  • 2021-11-19 at 1:36 pm
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    You can’t make this stuff up.

    Can anyone defend the actions of the BoS?

    • 2021-11-19 at 6:35 pm
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      Not that I’m aware of, but they keep getting reelected!

  • 2021-11-19 at 2:18 pm
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    Having dealt with zoning a few times in the past year, I can tell you that’s a well-staffed, do-nothing group in county government that could be reduced. They enforce none of their extensive rules and allow breweries, wineries and all manner of craptastic operations all over Western Loudoun making it uglier by the day. There are surely other sections of county government that have grown way too large (economic development comes to mind) and don’t do much more that guarantee jobs for those employed in that office.

  • 2021-11-19 at 2:57 pm
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    Its a little misleading to say “new development’ drives revenue growth…since while there are one time tax payments to the county for new development, the costs in services for new homes and the residents in them (sheriffs office, fire, schools, stormwater infrastructure and maintenance, roads, libraries, etc) far, far outweighs the tax income from them. Promoting new development in order to balance a budget just leads to the need for higher taxes down the line.

  • 2021-11-19 at 3:57 pm
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    Does this take into account the reduced enrollment in LCPS and potential reductions in the LCPS budget.

    • 2021-11-19 at 6:36 pm
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      No! And there’s always a bunch left over for BS!

  • 2021-11-19 at 4:44 pm
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    This is outrageous. Clearly, the data center lobbyists have been doing a number on the Board.

    The whole point of adding data centers years ago was to reduce the real estate property tax burden when Loudoun homeowners were paying the 33rd highest real estate taxes in the country out of 3,200 counties. That is the garbage we taxpayers got sold for adding these ugly, resource-sucking monstrosities. And, then, the Board just kept spending the new revenue without every lowering the property taxes. We got the worst of both worlds and the Board is about to make it even worse.

    Loudoun County: High taxes + crappy schools + high cost of living + lots of telecommuting options. What could possibly go wrong?

  • 2021-11-19 at 10:25 pm
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    Even Stevie Wonder saw this coming. Once again, the hard working people get to foot the bill, while this BOS pats themselves on the back for a job well done.
    It’s hard to believe people fall for this, but then you read comments like the one above from a person that feels the need to comment on every single article and ALWAYS makes it about politics, accusing the incoming Governor of “playing fast and loose” with tax laws when all any person who can afford a good tax attorney does is follow the laws and take advantages of tax breaks that many of us either don’t qualify for or can’t afford an attorney to help us find them. I don’t begrudge anyone for taking advantage of their resources to save themselves some money- that’s how they became wealthy in the first place. However, dolts like that person above want to cry that the rich don’t pay their “fair share” of taxes, when in fact, they pay more than most of us could ever dream of making. I’d be perfectly fine with a flat tax, this way everyone pays their “fair share” for sure.

  • 2021-11-19 at 11:29 pm
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    Maybe the BOS and CA Hemstreet should first publish the results of 1) the miss guided projections in data center revenues for the past 2 years by LC Economic Director (aka Data Center Alley Wizard), 2) County Executive wages and full compensation benefits for 2022, 3) the total amount of data center personal property revenues vs resident personal property revenues, 4) LCPS and teacher salaries, including all attorney fees to defend all lawsuits that were from miss actions by the LCPS members of the board.

    I believe data center personal property revenues is much greater than resident personal property revenues and the LC BOS SHOULD NOT be providing a reduction in data center personal property until the residents of LC know how the County will directly recoup the $80M+ loss of revenue projections. Maybe Hemstreet and the Data Center Wizard should forego their salaries and full compensation for not appropriately projecting revenues. Feel the pain of Loudoun County residents have felt since 2019 caused from C-19, and LCPS Board. Give Parents a tax cut to allow Parents to redirect tax revenues to private education.

  • 2021-11-20 at 10:40 pm
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    Seems like this is backwards. Shouldn’t the profit making data centers be paying more and homeowners less? And this blaming the Democrat BOS is poppycock. The massive development mess that LoCo has now can be tied to the developer friendly GOP BOS of years past, ask Scott York and Steven Snow. They never said no to a developer and just piled more and more burdens on LoCo homeowners. Tax the smitherreens out of the data centers and if they want to pull up stakes, adios muchacho. They are dog ugly and just make LoCo a target for some crackpot terrorist. Wouldn’t they love to take out the data centers with 70% of the world’s traffic passing through here? Whose idea was that to attract data centers after 9/11?? Brilliant!

  • 2021-11-20 at 11:40 pm
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    Outside the LCPS apologist, Tim Smith, I don’t think there is a single comment here supporting the BOS. Hopefully, they will be replaced in less than 2 years. At least those paying attention have learned how corrupt and incompetent Loudoun’s government has become.

  • 2021-11-21 at 11:48 am
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    Let’s see…Fair share tax calculation…County assesses property value, check. County sets tax rate, check. County does math and calculates taxes owed, check. Nice try with your liberal rhetoric Mr. Smith.

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