After the Board of County Supervisors unanimously approved a plan last week that would keep any future property tax increases below 6 percent, Prince William County officials said they were confident that they could still pay for new schools and roads.
In recent years, the county has raised taxes repeatedly to pay for new schools, roads and other services in the fast-growing county.
While supervisors have reduced the tax rate, it has been more than offset by rising property values and assessments, resulting in big percentage increases in homeowners' tax bills.
"We all realized that we had to do something to reduce the impact on our taxpayers," said Supervisor John D. Jenkins (D-Neabsco).
Aided by some additional money from the state and continuing assessment increases, number-crunchers were able to come up with a plan that would maintain the status quo of 56.75 percent of county revenues going to schools while increasing money for transportation and capping tax increases.
County Executive Craig S. Gerhart said the plan would still allow the fast-growing county to continue its heavy investments in new schools, new roads, firehouses and other public infrastructure.
Gerhart praised school officials who he said understood the need to provide tax relief. He said an additional $15 million to $22 million in state education aid helped ease the pressure on school officials, who then agreed to allow the county to keep all the revenue from the recordation tax. Gerhart estimated that would add up to an additional $7 million for the general government.
"We have committed to the schools and the board that we will use that $7 million for additional transportation improvements," Gerhart said. "We can't say right now exactly how that will manifest itself."
"That could result in a significant amount of money for transportation," said Supervisor W.S. Covington III (R-Brentsville).
The genesis of the plan arose from the supervisors' recent one-day planning retreat, where members unanimously agreed that something had to be done to reduce the tax increases.
"It took us a while to work it out but we soon came to a consensus," said board Chairman Sean T. Connaughton (R-At Large). "We feel fairly confident that this is a long-term plan."
Connaughton said the key is continuing economic growth and increasing home values. Although county revenue estimates have always been on the conservative side, he said, it was important to recognize what he called a "long-term change in the real estate market."
"We thought that the market would be similar to past cycles when it would peak and then drop like a rock," Connaughton said. "This market does not seem to have hit a peak yet. We expect really large assessment increases next year."
The county's bond rating was upgraded last week to AAA -- the highest possible -- by Fitch Ratings, one of the major rating agencies, in advance of the county's $38 million bond sale. Moody's Investor's Service maintained the county's Aa1 rating, the second-highest rating.
By agreeing to a cap on tax increases, supervisors appear to have taken a large step toward avoiding a political fight over tax issues next spring. Earlier in the year, some supervisors, especially newly elected board members, took issue with spending and tax increases.
"I think this [tax cap] is a result of the pressure we put on this year," said Supervisor Corey A. Stewart (R-Occoquan), who, along with Covington and John T. Stirrup Jr. (R-Gainesville), raised concerns about the county's tax and spending policies. Stewart said the tax cap was a good first step, but he would like to see it set lower and guaranteed for at least the next five years.
He said the budget process is still too focused on spending available revenues. Not enough attention is given to prioritizing and reducing spending, Stewart said.