Hatrick Asks for 18% Increase, Faces Slowdown in Tax Revenue

The Loudoun County public schools chief last night asked for an 18 percent spending increase for the next school year to help keep pace with rapid growth and rising expenses. But the proposal for a $106 million budget jump faced an immediate obstacle: stagnant property tax revenue.

Even before Superintendent Edgar B. Hatrick III gave the School Board his proposed budget, the county Board of Supervisors confronted a potential shortfall of at least $61 million in 2007-08 if property taxes are not raised, according to projections announced last week by County Administrator Kirby M. Bowers.

The gap is largely attributable to flattening home assessments. In recent years, assessments and tax revenue rose steadily, helping fund the county government and schools.

Annual spending on the 50,000-student system consumes a large share of the county's current $1.1 billion budget. Strong public schools are a key draw for many young families who have moved to the booming county.

But soon Loudoun's elected officials might have to cut services or find more money to help the system keep competitive teacher salaries, innovative programs and relatively small classes. At least three of the nine supervisors have said they favor keeping the tax rate at 89 cents per $100 of assessed value.

It's a dilemma other jurisdictions could face in coming months as the region's real estate market softens and school officials calculate rising costs.

"It's a very different situation than it was even a year ago," said Mario Schiavo, budget director for Fairfax county public schools. "The real estate assessments are flat; sales are down." Schiavo said the Fairfax system might face tough decisions in compiling a budget proposal for the School Board in January.

In Prince William County, expected to add about 1,500 students in the next school year, school officials are looking at a possible $18 million shortfall as they develop their next budget, said George Kisha, the county's associate superintendent for finance and support services.

As for Loudoun, dozens of Virginia school systems have fewer students than the 3,000 that the county gained this school year. Hatrick's operating budget would raise spending to $711.9 million, up from $605.6 million. Factors behind the proposed increase are higher enrollment, the opening of four schools and the rising costs of health insurance and instructional materials, officials said.

Hatrick's budget also seeks teacher salary increases to keep the county on par with its neighbors. Under his proposal, starting teachers would be paid $43,500, up from $40,986. Average teacher pay in the county would rise to $62,592, from $58,540.

Hatrick said the county government should assess public needs and public willingness to spend before making decisions on the tax rate. He cited five school-related bond measures that Loudoun voters approved this month with overwhelming majorities.

"The message . . . is very clear," Hatrick said. "The citizens of the county want to have an excellent school system, and they understand that excellence comes with a price tag."

The School Board will hold a public hearing Dec. 12 before voting on a budget that it will recommend to the Board of Supervisors.