Loudoun County real estate assessments are expected to decline more than 4 percent in 1991, likely forcing a tax rate increase and deep spending cuts for the budget year that begins next July, officials said last night.
Although the typical single-family house is expected to remain close to its current assessment of about $150,000, commercial property is forecast to decline almost 10 percent in value from this year to next, and agricultural land may drop almost 7 percent, the Loudoun Board of Supervisors was told.
The overall expected decline of about $6 million in real estate tax revenue has driven the fiscal 1992 deficit projection to nearly $33 million, County Administrator Philip A. Bolen told the supervisors.
The declining real estate values reflect a dramatic shift from the late 1980s, when speculation drove up assessments of vacant land as much as 50 percent a year. The current assessment decline is "something I've never experienced in my 19 years in the business," said county assessments chief William Gardner.
The Board of Supervisors put off until the first week of January a decision on what real estate tax rate will be advertised as part of the fiscal 1992 budget, but some supervisors suggested that an increase from the current 85 cents per $100 of assessed valuation to as much as 94 cents will be needed.
That would increase the typical tax bill about 10 percent, but the remaining deficit still would force elimination of all raises for school and county government workers, delay construction projects and other initiatives, and require about $11 million in cuts from current programs and services, Bolen told the supervisors.
With a 9-cent tax rate rise, both the schools and county government would need to trim their anticipated requests by 9 percent.
Without a tax rate increase, the County's spending cuts could exceed 16 percent, officials said. "Our game plan is relatively simple," Bolen said. "We have to reduce spending."
For the current fiscal year, a shortfall of nearly $8 million in the $273 million spending plan is being handled by carrying over funds from the previous year, freezing hiring and cutting school spending and other agency costs, officials said.
In addition to increasing the real estate tax rate, Loudoun is considering raising business and utility taxes.
Also last night, the supervisors took the unusual step of rescinding their Dec. 4 request to the Circuit Court that it schedule a March 12 bond referendum for $31.5 million to build a new high school in the Ashburn area.
Earlier in the day, the School Board voted 4 to 3 to seek the reversal. Some officials concede that the election-year bond issue could fail.
School Board Chairman Carroll Laycock said a March 1992 referendum could still allow the school to open as planned in fall 1994.