County supervisors have begun to scale back some of their signing plans as they seek to control growing tax bills over the next fiscal year.
The county’s plan to administer the health department locally has been postponed for a year, and staff to support collective bargaining and the county’s broad unmet housing need strategic plan has been reduced as supervisors continue to look for places to cut the fiscal year 2023 departmental budget. They also gave County Administrator Tim Hemstreet more flexibility over where the money for the housing fund comes from – the budget includes $5.9 million for affordable housing, or half a cent property tax. After a vote on March 10, while the amount of funding remains the same, that money may come from other sources, such as divestiture deals with developers.
Supervisor Matthew F. Letourneau (R-Dulles), the current senior board member, compared that to the existing policy devoting two cents’ worth of property tax revenue to transportation, which began during his tenure. first term. Much of this funding comes from supply and grant agreements.
However, Loudoun Housing Coordinator Sarah Coyle Etro stressed that providing a dedicated source of funding for affordable housing would be important.
“It’s very critical. You can all tell by the loans you’ve made, it’s expensive to be able to provide affordable housing, and so having a game plan of how you’re going to facilitate adding finance would be a good thing because eventually the sources we have, we won’t have them and we will always have the need,” she told supervisors.
The cuts mean supervisors are abandoning some of their own initiatives as they have been cautious about cutting new positions that county department heads have called for. They also push back on initiatives that supervisors think they can delay, for example with collective bargaining. County Chairwoman Phyllis J. Randall (D-At Large) said outside of the firefighters’ union, she doesn’t expect a union to be willing to come to the county to begin negotiations. bargaining in this budget, and she has decided to cut a lot of staffing to support collective bargaining, even though that is one of her major concerns. She said this budget year calls for tough choices.
“It’s always a priority of the board at the end, so I think when we start talking about sacrifices, that’s what it has to be,” she said.
Those insights come, in part, from Hemstreet, whom supervisors have asked for advice on what they can cut from the budget with the least impact on county operations. He offered options to cut up to $20 million from the budget in a March 10 memo.
Usually supervisors have this advice with the proposed budget – they usually asked Hemstreet to include options in their budget to reduce the budget and the tax rate. In December, supervisors voted 6-2-1 to call for a budget without those options, with Letourneau and Caleb E. Kershenr (R-Catoctin) opposing, citing that concern.
Even with the cuts, county real estate taxpayers will almost certainly see tax bills rise as assessments have climbed even faster than usual. The county has generally relied on new construction to increase the tax base and support budget increases, but this year new construction has been relatively flat. And while supervisors are proposing one of the biggest tax rate cuts, property values have risen so much that the average tax bill will still be higher than last year.
County budget officials have also warned supervisors that they need to balance their property tax revenue with property tax revenue, and that data center revenue now represents too much local revenue. They warn that data center tax revenues are less reliable than property taxes, pointing to the scramble last year to make up for those $80 million lower-than-expected revenues. But it also means that if supervisors want to reduce the property tax rate and maintain that balance, they must also reduce personal property tax rates, amplifying the impacts of tax cuts on the county budget.
Currently, supervisors are on track for a property tax rate of $0.89 per $100 of assessed value and a five cent reduction in the personal property tax rate to $4.15 per bracket. $100 of assessed value. They will continue to work on the budget until March, with a vote to pass a budget expected in April.
Supervisors will hold another budget working session tonight, where they will hear among other things the county’s capital improvement program and recommendations for employee salary increases.