Officials Bracing For Downturn In Assessments
By Amy Gardner
Washington Post Staff Writer
Wednesday, November 22, 2006
After leading the region with double-digit increases in property assessments, Loudoun County taxpayers should expect their home values to decline in each of the next two years, county budget officials said yesterday.
A softening real estate market means tough times for government services, which remain under pressure from a rapidly growing population but can no longer rely on rising assessments to generate additional tax revenue.
County Administrator Kirby M. Bowers told the Loudoun County Board of Supervisors yesterday that the 2007-08 budget would be short $61 million if the county's tax rate, 89 cents per $100 of assessed value, remained the same. That projection takes into account only minimal spending increases to cover school enrollment growth, additional sheriff's deputies and the cost of operating three new fire stations, a performing arts center, a library and two park-and-ride lots, Bowers said.
"I'm not finished with this process yet, but this gives you a snapshot of what I'm dealing with," Bowers told supervisors.
As the fastest-growing county in Virginia and one of the fastest-growing in the country, Loudoun, with a population of about 260,000, has expanded services at a breakneck pace in recent years to keep up with demand for police and fire protection, schools, libraries and recreation.
The expansion has cost Loudoun residents, whose property tax bills have risen on average 12.5 percent in each of the past four years.
But booming home values have masked those increases; in some years, supervisors were able to lower the tax rate but still collect more revenue because of increased assessments.
For now, at least, those days are over. And with all nine board seats coming up for election next year, supervisors will be under pressure not to raise the tax rate. That leaves only one option: cutting spending.
At least three supervisors -- Mick Staton Jr. (R-Sugarland Run), Lori Waters (R-Broad Run) and Eugene A. Delgaudio (R-Sterling) -- are pushing to keep the rate at 89 cents.
"The question is: Do we raise taxes to fully fund the requests, or do we trim the request to meet the tax rate?" Staton told the board yesterday. "My opinion is that we trim the requests."
Other supervisors took a different view, saying they are not willing to commit to a steady tax rate until they have looked at what would be cut and what effect the cuts would have on residents.
"That gives us no flexibility to deal with service shortfalls," said Supervisor James Burton (I-Blue Ridge).
Bowers told board members that he has trimmed more than $40 million from departmental requests in such areas as public safety, parks, libraries, health and welfare.
He said the shortfall could grow, depending on what the school system asks for. Schools account for nearly three-fourths of the current year's $1.1 billion budget.
School Superintendent Edgar B. Hatrick III is expected to present a proposed spending plan to the School Board on Nov. 28. Bowers told supervisors that he expects Hatrick to ask for $91 million more to accommodate an additional 2,800 students and the opening of five schools.
Bowers told board members that a 5 percent increase in the average residential tax bill -- from about $4,700 to about $4,900 for a single-family home -- probably would cover the projected shortfall.
That would require an increase in the tax rate of 7 cents, to 96 cents.
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