Lovettsville Town Manager Jason Cournoyer has proposed a $5.5 million Fiscal Year 2023 budget that represents a 32.1% increase over the current budget.
The proposed General Fund budget totals $1.76 million, a $403,904 increase, up 29.8% over FY22.
With the town experiencing soaring property values, a key challenge for the Town Council will be deciding where to set the real estate tax rate.
Cournoyer said new assessments on the town’s residential properties resulted in 16.7% increase in value, the highest he has seen in 15 years working in local government in Loudoun. The increase is largest for single family detached homes at an average of 19%. Overall, the value of a home in Lovettsville increased by $61,363 over last year, to $428,890.
With the Town Council’s goal to keep homeowners’ tax bills level, the equalized tax rate would drop to 15.2 cents per $100 of assessed value, down from 17.8 cents.
However, Cournoyer warned that a budget based on that tax rate also would require a transfer from the town reserves to keep pace with the town’s pay-as-you-go contributions to the capital projects budget.
He also presented an alternative 17.27-cent rate that would cover the CIP costs.
For the average single family detached home, the equalized rate would result in an annual tax bill of $733, while the alternative rate would generate a $833 bill.
The town expects to see the strongest growth in its consumer tax collections—including the meal tax and sales and use taxes—which have rebounded during the past two years when the council budgeted conservatively to brace against the impacts of the pandemic.
Cournoyer said that better-than-expected revenue provided a surplus that makes it possible for the town to consider a transfer from reserves, but warned that was not a sustainable approach. Without growth in town, the existing real estate tax base will not keep pace with higher operational cost without increasing tax bills, he said.
The town’s 980 residential units make up 97% of its 1,011 taxable parcels, putting the burden largely on homeowners.
He is proposing 3% increases in water and sewer rates, a measure that isn’t expected to generate much more revenue than was budgeted in FY2022. That’s because water usage has been tracking lower than expected and the rate increases are anticipated to close that shortfall.
The Town Council plans four budget work sessions, on Feb. 3, Feb. 10, Feb. 24, and March 10. A public hearing is scheduled for March 10, and an adoption vote is planned March 24.
The proposed budget may be reviewed at lovettsvilleva.gov/government/town-budget.