Proposed School Budget Increase Adds to Shortfall

A battle could be brewing between Loudoun County officials and the school district, which is seeking a hefty increase in spending in the face of a budget crisis that could result in significant property tax increases.

County officials have projected a deficit next year of as much as $251 million at the current tax rate, $0.96 for every $100 of assessed value. The estimate drew gasps and murmurs from current and incoming members of the Board of Supervisors when it was unveiled Wednesday night.

Part of the gap is the result of a slowdown in the housing market and a decline in home values, which are expected to continue to fall through at least the end of next year, county officials said.

But a large chunk represents a $117 million increase in spending proposed by Superintendent Edgar B. Hatrick III, who expects to add more than 3,000 students to the system next year and wants Loudoun to rival counties such as Fairfax in teacher quality and program offerings.

"The citizens of our county understand full well that if you want excellent services, you have to pay for them," Hatrick said yesterday. His proposed budget, he added, "maintains our position relative to other school systems in the area with which we compete to hire teachers."

County and school officials emphasized that the projections are preliminary. The School Board may cut Hatrick's request before presenting it to supervisors next year, taking into account any additional money from the state. County Administrator Kirby M. Bowers will not present his formal budget proposal to the Board of Supervisors until February.

But financial projections are grim across the region, as the drop-off in home sales, coupled with a spate of foreclosures, raises the likelihood that there will be sharp cuts in services and an increase in taxes in Northern Virginia and beyond.

"You can't save $200 million by just tweaking and letting jobs go unfilled or not giving raises," said Stephen S. Fuller, director of the Center for Regional Analysis at George Mason University. "Even though it is a four-letter word to say they're going to raise taxes, that's what they're going to have to do."

If the county does not trim spending, that would mean a property tax increase of about $940 for the average homeowner.

"We need sufficient funding to support excellence in our schools," said Susan Klimek Buckley (D), who will take office as Sugarland Run supervisor Jan. 1. "But at the same time, we need to keep taxes affordable, and that's where the balancing act lies."

Bowers made the Loudoun budget presentation before the newly elected supervisors, who will be sworn in Dec. 22. Among them are four freshmen, including Buckley, who will be taking their first stab at the county budget process when it begins in earnest in February.

All four campaigned this fall on a promise to slow rapid growth in Loudoun, whose population has virtually doubled in seven years to about 270,000.

As county officials have sought to meet the demands of the state's fastest-growing school system, the typical Loudoun tax bill has risen by an average of 13.5 percent per year since 2000.

But outgoing Supervisor Mick Staton Jr. (R-Sugarland Run) noted that the rate of new home construction has slowed significantly since 2004, when the Census Bureau rated Loudoun the nation's fastest-growing county. Yet taxes kept going up because of a failure by the board to limit spending, especially on education, he said.

"It's going to be a rude awakening for the new board," said Staton, one of the current board's most fiscally conservative members. "The bottom line is, taxes are determined by the politicians who hold office. And the only way they're going to keep taxes under control is by saying no."

Part of the problem is that Loudoun's student enrollment is growing at a faster clip than the population as a whole, said Ari Sky, the county's budget officer. Loudoun's population is expected to grow by about 3.5 percent next year, but school enrollment is likely to expand by about 6 percent, according to county projections.