Jump in Tax Rate Looms as Home Values Plunge

Prince William County residents will see an increase in next year's property tax rate, no matter what.

County officials estimate that real estate values will drop by 14 percent on average, requiring at least a 13 cent increase to the 78.7 cent property tax rate to keep revenue stable. But to properly staff public safety agencies, pay for technology upgrades and build roads approved in a 2006 bond referendum, the tax rate would need to be closer to 95 cents. And to fund the county schools plan, the rate would need to grow to nearly 99 cents, for a $257 increase in the average tax bill.

These rates don't take into account the Police Department's need for $14.2 million over five years if a crackdown on illegal immigrants is carried out, or the costs of defending a lawsuit filed by civil rights organizations over the clampdown.

The projected rates do include cuts to employee benefits and delays in expanding the public safety training center and in constructing schools.

"We will be looking at declining values of residential real estate for four years in a row," County Executive Craig S. Gerhart said to the county supervisors during a meeting Thursday to discuss financial matters.

County staff members estimate a 30 percent drop in average home values between fiscal 2008 and 2012. And the real estate woes have led to a "ripple effect" in sales and business taxes collected by the county, said Christopher Martino, the county's finance director.

Despite what Supervisor W.S. Covington III (R-Brentsville) termed a "pretty scary" outlook, the chairman of the Board of County Supervisors, Corey A. Stewart (R), refused to consider a less-expensive, staggered implementation of the illegal-immigration crackdown. A vote on the program is set for Tuesday.

"It all has to do with priorities," Stewart told the board.

"All you are doing is a quick shot," Supervisor John D. Jenkins (D-Neabsco) said to Stewart. Jenkins said he favors the staggered plan, in which officers would be hired and trained as money becomes available.

Vice Chairman Martin E. Nohe (R-Coles) noted that the police's illegal-immigration plan would cost $2.8 million in each of the next five years. "We just spent the last six hours discussing how we don't" have the money, Nohe said.

Stewart proposed using money in the county's contingency fund for the program, which would cover it for fiscal 2008 but offered no solution for paying for the program in the following years. "We'll have some tough decisions to make," he said.

The contingency fund, usually used in emergencies, is a percentage of the budget that the board sets aside. The fund has about $796,000; it would drop to $221,000 if Stewart's proposal is approved.

Tough decisions also will have to be made about the schools. The School Board has said the system will be $32.1 million in the hole in the next fiscal year. At Thursday's meeting, Supervisor Maureen S. Caddigan (R-Dumfries) said the deficit figure represents what the schools need, not what they want.

County staff members said the schools' projected shortfall does not include such perennial requests as smaller classes, a technology upgrade, salary increases for teachers and staff members, or money for the local share of state revisions for the Standards of Quality.

"There is going to be this argument that is destined to happen. . . . We are the ones who are responsible for the tax rate," said Stewart, who then lamented that not enough schools are being built.

The supervisors also are set to vote Tuesday on payments from developers to the county to mitigate the impact of new housing, which include a fee for parks and open space, and to decide on the county's open-space provisions. The Planning Commission approved a county goal of having 25 acres of open space per 1,000 residents by 2030, which would require $790 million. The county staff plans to present a goal of 15 acres per 1,000 residents, which would cost $346 million. The county now has less than 10 acres per 1,000 residents.

"Why set a low standard now? Are we guessing we'll have budget trouble for the next 30 years? That doesn't make sense," said Kim Hosen, planning commissioner for the Occoquan District and executive director of the Prince William Conservation Alliance. Hosen said the county is well behind neighboring jurisdictions' open-space goals.