Prince William County supervisors are pushing off any action on a controversial tax hike that would primarily affect data centers, a pet proposal of Republican At-Large Chairman Corey Stewart.
He was hoping to triple the “computer equipment and peripherals” tax rate, in order to generate $21 million to afford a small real estate tax cut, new annual funding for school construction and pay raises for public safety employees. But the Board of County Supervisors opted to study the issue in more detail instead of voting on his proposal April 17, the board’s “markup” session and final chance to substantially alter the fiscal 2019 budget before taking a final vote on April 24.
In an interview after the meeting, Stewart dubbed the outcome “a big win for Google and Amazon, and a big loss for citizens,” but his colleagues on the board urged a bit more caution.
“Quite frankly, we should not be doing this overnight by tripling it,” said Supervisor Frank Principi, D-Woodbridge. “Certainly, there are a lot of needs to be addressed with new revenue...but maybe the right time to talk about this is six months from now.”
Stewart’s tax hike proposal attracted sharp criticism from the county’s business community, particularly the tech sector, over concerns that such a sharp tax increase would stifle expansion efforts by existing data centers and scare away prospective investors.
Stewart and some of his fellow supervisors painted the measure as a matter of fairness, noting that data centers have long paid a tax rate substantially lower than the county’s standard personal property rate. But the change was substantial enough that four supervisors — Principi, Maureen Caddigan, R-Potomac, Jeanine Lawson, R-Brentsville, and Marty Nohe, R-Coles — expressed grave concerns about the tax hike Tuesday night, enough to scuttle the proposal on the eight-member board.
Accordingly, the board decided instead to roll a study of Stewart’s proposal into an existing examination of county tax rates, with the ultimate goal of revisiting the matter ahead of fiscal 2020 budget discussions. The compromise hardly placated everyone on the board, however.
“The status quo is not working,” said Supervisor Pete Candland, R-Gainesville. “The answer isn’t to continue to do the same thing over and over again.”
Candland has his own proposal to find new funding for county schools — he’s envisioning a new tax specifically set aside to pay for $170 million in school construction to move students out of trailers and reduce class sizes.
But, in an interview after the meeting, he said he decided to hold off on pressing the matter Tuesday night to see if Stewart’s proposal gained traction. In all, Stewart was hoping to send an additional $9 million to the school division above the county’s revenue-sharing agreement with the schools.
“We had a chance to significantly increase revenues to the schools here,” Candland said. “It’s frustrating...but my plan doesn’t assume any funding until 2020, so we have some time here.”
Without any action on Stewart or Candland’s proposals, the roughly $1.2 billion budget includes a 5.7 percent bump in the county’s fire levy, and no change to the real estate tax rate of $1.125 per $100 of assessed value. However, with property values creeping upward, those rates will bump up tax bills for the average county resident by about $136 next year.
The budget also includes money for a pay raise for the county’s public safety workers, such as firefighters, police officers and jail staffers. In fiscal 2019, the county plans to spend $3.1 million to address “pay compression” within those professions, where more experienced or higher ranking employees make less than colleagues with less time on the job or inferior ranks.
A report prepared for supervisors in January showed that compression was a prime factor in public safety workers abandoning Prince William for neighboring jurisdictions.
County Executive Christopher Martino is planning to spend another $9.4 million to continue to address the issue, moving public safety staffers to set salary scales so their pay will rise commensurate with experience, but that change won’t take effect until fiscal 2020.
Martino expects that amount will be funded by big increases in the county’s fire levy, a daunting prospect for supervisors as local elections near in fall 2019. In fact, Stewart was hoping to raise the tax on data centers to help the board afford that salary scale change in 2019, and avoid the need for any fire levy increase.
“It’s a massive tax increase for county residents,” Stewart said. “Frankly, I question whether or not the board is going to want to stomach a tax increase of the fire levy of that much in two years.”
While some supervisors agreed that raising the fire and rescue tax rate is an unpleasant prospect, Nohe took umbrage that Stewart would be so willing to write off the commitment of his fellow supervisors to providing public safety pay raises.
“Over the last 14 years, no one has voted against budgets with raises for teachers and firefighters and police officers more than you have,” Nohe said, turning to Stewart. “So to try to push this off onto us, it’s insulting.”
However, the board did agree to some modest tweaks to the budget Tuesday night.
In a non-binding straw poll, the board unanimously agreed to send $350,000 to the Freedom Aquatic and Fitness Center on George Mason University’s Manassas campus.
The center — which is funded jointly by Mason, the county and the city of Manassas — was asking for $450,000 annually from the county over the next five years to fund renovations to the facility. But the board balked at such an ongoing expense, opting instead for a one-time expenditure this year and pledged to study the center’s request for additional funding in more detail.
The board also unanimously agreed to spend up to $750,000 to dredge a portion of the Neabsco Creek.
The U.S. Coast Guard recently declared that the waterway is too shallow for motorized watercraft, imperiling marina owners and other boaters along the creek and Potomac River. Principi and other local officials have been locked in negotiations with the Coast Guard and Army Corps of Engineers over how to address the issue, and supervisors decided to dip into some leftover funding from fiscal 2018 to dredge a 50-foot-wide channel leading to the creek.
None of these changes will be finalized, however, until the board formally votes to approve the entire fiscal 2019 spending plan at its April 24 meeting at 7:30 p.m.