Board Takes Preemptive Action on Tax Rate

With the likelihood of a grim budget season already strong, Loudoun County supervisors signaled their intent Tuesday to do what they can to keep the tax rate down next year even if real estate assessments stay flat.

The Board of Supervisors instructed County Administrator Kirby M. Bowers to put together a budget this winter that holds the tax rate at 89 cents per $100 of assessed value. That won't be easy in a year when property assessments are not likely to rise at the rapid pace of recent years, which gave supervisors cover to increase spending yet still lower the tax rate.

"We need to start making some tough decisions," said Supervisor Mick Staton Jr. (R-Sugarland Run), who initiated Tuesday's action and who has been a consistent voice on the board for fiscal conservatism.

Yet the pressure to spend will continue. The Loudoun school system, which accounts for two-thirds of the county's $1.1 billion budget, is scheduled to open at least five schools next fall, with annual operating costs totaling $12.5 million. Continued growth of the county's population will send as many as 3,700 more children into county schools and create the need for more sheriff's deputies as well.

Staton initially wanted to instruct Bowers to advertise a tax rate of 89 cents in the public notice that the county publishes during budget deliberations. Such a move would have effectively prevented the board from approving a higher rate without advertising the budget anew. And that would have inappropriately tied supervisors' hands months before they'll know clearly how the budget picture looks, opponents said.

"The revenue picture is fuzzy at best," said Supervisor James G. Burton (I-Blue Ridge). "I understand from the tax assessor that assessments may very well decrease. Not just increase at 3 percent or so, but actually decrease. It is bad government practice, in my opinion, to start off with the answer -- an answer of 89 cents."

As a result of such concern, supervisors reached a compromise giving Bowers direction but not locking the board into a tax rate. Bowers will probably present his proposed 2007-08 budget in February.

If assessment growth proves as low as county analysts predict, the result will be a far tougher budget season than the past several years have afforded. With double-digit assessment increases, supervisors have been able to keep the tax rate the same -- or even lower it, as they did this year, from $1.04 to 89 cents -- yet still collect more revenue.

Homeowners have not been happy with the growth in their tax bills, which have been rising in the double digits. But supervisors have always been able to say that they have not increased the rate.

They also have been able to say that they have reduced spending over the staff proposal. That's a typical component of public budget proceedings: The county staff presents a budget, and the elected officials take items out.

By instructing Bowers to start the process with a budget requiring no tax increase, the supervisors will make it exceedingly difficult to cut even more.