Prince William County Homeowners Would Receive Biggest Reduction in Property Tax Bills in the Washington Suburbs

Prince William County homeowners, at ground zero of the local foreclosure crisis, would receive the biggest reduction in property tax bills in the Washington suburbs under a measure approved yesterday.

Most local governments are raising tax rates to offset the effects of the sagging housing market. The Prince William Board of County Supervisors also is moving to raise the property tax rate. But because home values in the county have fallen 32 percent, the average bill for Prince William homeowners will drop at least $435 -- underscoring what one county leader called a political distinction.

"I believe the way to spur the economy is by cutting taxes, not raising them. It comes down to a philosophical divide," board Chairman Corey A. Stewart (R-At Large) said. "Prince William is the only Republican-led jurisdiction in the D.C.-metro area. It shouldn't be too much of a surprise we're cutting taxes."

After debating several proposals, Prince William supervisors agreed on an advertised tax rate of $1.212 per $100 of assessed value. That is 24 cents higher than the current rate. But the tax bill for an average $240,000 house would be almost 13 percent less. The advertised rate, a preliminary step, sets a cap for the year. Supervisors may lower the rate but not raise it.

Prince William's proposed rate is higher than any other in Northern Virginia except Loudoun County's. But officials say the average residential tax bill in Prince William would be about $1,400 less than in Fairfax, Loudoun and Arlington counties.

Loudoun also is considering a tax cut. Although Loudoun's proposed rate -- $1.29 per $100 of assessed value -- is 15 cents higher than the current rate, the average tax bill in the county would be $167 lower because housing values have dropped 14 percent. Fairfax has proposed a 14.5 cent rate increase to $1.05 per $100 of assessed value, which would raise the average tax bill in the county about $60.

Prince George's County can not ask residents to pay more in property taxes without help from state lawmakers because of a voter-imposed cap passed in 1978. Montgomery County lawmakers have pledged not to raise property taxes above the local limit after homeowners received a hefty increase last year.

In Prince William, the two Democratic supervisors on the eight-member board, John D. Jenkins (Neabsco) and Frank J. Principi (Woodbridge), voted against the proposed tax rate. They each offered alternatives that failed to win Republican support.

The spending plan County Executive Craig S. Gerhart proposed last month would reduce services, suspend road construction, freeze salaries and tap reserves to close a $190 million shortfall projected for the fiscal year that begins in July.