Prince William Board of County Supervisors Chairman Corey A. Stewart wants to sharply raise taxes on data centers and other businesses that rely heavily on computer equipment so that Virginia’s second-largest jurisdiction can fix aging schools and ease the tax burden for strapped local residents.
The proposal, which targets one of the state’s most powerful industries, could also help Stewart shore up his populist credentials as he campaigns for the Republican nomination to take on Sen. Tim Kaine (D) in November.
It will come up for a vote Tuesday night, when the eight-member county board adopts a $1.2 billion budget for next fiscal year. County lawmakers appear to be evenly split on the plan, which would require a majority vote to pass.
Prince William’s personal-property tax rate for “computers and peripherals” is currently $1.25 per $100 of assessed value, roughly a third of the tax rates for the same category in Fairfax, Loudoun and Arlington counties.
It was set in the 1990s to try to lure AOL, Stewart said. Any increase in the tax would disproportionately affect data centers, a growing industry in Prince William County that already generates about $25.6 million annually in tax revenue.
Stewart argues that bringing Prince William’s tax rate closer to those of neighboring jurisdictions would produce an additional $21 million, allowing the county to lower residential property taxes by an average of $35 a year per household, allocate $9 million for county schools and avoid a slight increase in a levy for emergency services proposed by County Executive Christopher E. Martino.
“We never brought it back up,” Stewart said. “It’s time to do it.”
Supporters of the idea point out the steadily rising number of classroom trailers at some crowded schools. Opponents argue that a tax increase would chase data centers out of Prince William after the county has positioned itself as a prime location near Loudoun’s “Data Center Alley” in Ashburn, through which nearly 70 percent of the world’s Internet traffic flows. Josh Levi, vice president for policy at the Northern Virginia Technology Council, noted that other Virginia jurisdictions, including Henrico County and Virginia Beach, have recently lowered their tax rates for computer equipment.
“There may be some short-term gain, but we’d be suffering some long-term pain because of it,” said Supervisor Frank J. Principi (D-Woodbridge).
Stewart shrugs off such arguments, casting his plan as a fight on behalf of ordinary residents for basic comforts like smaller classroom sizes and affordable homes.
“We’re talking about the citizens versus Amazon and Microsoft and Google and Apple,” Stewart said during a recent board meeting at which supervisors debated the idea.
With the June 12 Republican primary approaching, the plan is something of a political gamble for Stewart. It is opposed by both the National Taxpayers Union and Americans for Tax Reform, key conservative advocacy groups.
But data centers have become an attractive political target in Prince William — particularly on the more conservative western edges of the county, where residents fought against a Dominion Energy power line route prompted by a data center complex planned by a subsidiary of Amazon. (Amazon founder Jeffrey P. Bezos also owns The Washington Post).
Stewart may try to distinguish himself from his primary-election opponents, including Del. Nicholas J. “Nick” Freitas (R-Culpeper) and evangelical pastor E.W. Jackson, by touting his effort to cut taxes for constituents at the expense of corporate behemoths.
“There are few things in politics more valuable than making the case that you’re looking out for the beleaguered taxpayer,” said Stephen J. Farnsworth, a political-science professor at the University of Mary Washington in Fredericksburg. “The proposal is a win-win. Stewart benefits if it passes; Stewart benefits if it fails.”