Prince William County Republicans are sounding the alarm on a potential 7% increase in real estate tax bills for county homeowners.
Over the past two weeks, county officials have presented their proposed $1.35 billion budget for fiscal 2022, which starts July 1, along with a $1.02 billion six-year Capital Improvement Program. The capital program includes $224.8 million for the upcoming fiscal year.
Residential real estate and personal property tax rates are not proposed to increase, although the average homeowner will pay more due to higher assessments under the spending plan. And county employees will be eligible for a 3% performance-based pay raise.
County Executive Chris Martino’s operating budget proposal is an increase of 5.4%, or $69.6 million, over the current $1.29 billion budget for fiscal 2021, which ends June 30. The current spending plan included a $562.2 million capital plan, with $172 million for fiscal 2021.
The spending plan calls for a $1.60 tax per $100 of value on business computers and peripheral equipment, a 25-cent hike over the current rate. That levy primarily applies to data centers. During the budget presentation at Tuesday’s Board of County Supervisors meeting, Supervisor Yesli Vega, R-Coles, requested information on the revenue generated if the tax was raised to $2.10, or halfway to the levy in Loudoun County.
The proposal also includes a 30-cent per pack tax on cigarettes, estimated to generate $3 million in revenue. The county currently does not have a cigarette tax.
The real estate rate would remain unchanged, but rising property values are expected to increase the average residential homeowner’s tax bill by $306, according to the presentation. The rate sits at $1.125 per $100 of value.
The budget proposal says residential real estate values increased by an average of 7%, while commercial real estate values dropped an average of 4.5%. The increased assessments would result in an effective tax increase.
For example, a home valued at $400,000 in 2020 would be worth $428,000 for tax purposes in 2021, at a 7% increase. If the real estate tax rate remains the same, the homeowner’s taxes would go up from $4,500 to $4,815.
The personal property tax, which primarily applies to vehicles, is proposed to remain at $3.70 per $100 of value.
In his presentation to the board, County Executive Chris Martino suggested the board consider implementing a 4% meals tax in fiscal year 2023. Although several speakers railed against the proposal during public comment at the Tuesday meeting, it was included only as a consideration for a later year, not the upcoming budget.
Martino said the meals tax conversation was included in the presentation only because the board requires county staff to provide a five-year plan during the budget process. Items beyond the upcoming fiscal year are not binding.
Supervisor Jeanine Lawson, R-Brentsville, said she did not support the proposed tax rates and asked how much the real estate tax rate would need to be lowered for the county to avoid an effective increase.
Budget Director David Sinclair said the rate would need to drop to around $1.05 per $100 of assessed value. Reducing the rate, he said, would cut proposed revenues by $51.2 million, of which $29.3 million would come from the allocation to the school division, with the other $21.9 million going to the county’s general fund.
“I understand that there are a lot of things we would like to do, but I also feel a need to defend the taxpayer tonight,” Lawson said. “We have a lot of families struggling, and they’re applying for public benefits because they’re having a hard time making ends meet in their own homes.”
Vega and Lawson requested more information on the impact of new construction on county revenues.
The county must submit the advertisement for a public hearing on the tax rates by March 4, and the board next meets on March 2. Lawson made a motion to instead advertise a real estate tax rate of $1.05, but rescinded it after Supervisor Andrea Bailey, D-Potomac, asked for the board to have time to review the proposal and the rates.
The board is not bound to the tax rate it advertises for a public hearing. The board can adopt a lower rate than advertised, but cannot exceed it.
The county also plans to institute a licensing fee on out-of-state vehicles kept in the county. Martino said the program would enforce compliance with personal property taxes with an out-of-state tax of $100 and a penalty of $250 for not registering in the county on top of the regular tax bill for the vehicle.
The proposal includes $664 million for the school division, a $34.4 million increase over the current year. The allocation is largely in line with Superintendent Steven Walts’ initial proposal to the School Board.
The proposal calls for 74 new positions throughout the county, with 33 in Human Services, 15 in Fire and Rescue, eight in the police department and two in the Sheriff’s Office.
Among other highlights of the proposed budget:
- $234,420 to add two positions in the office of Commonwealth’s Attorney Amy Ashworth.
- An additional $9.9 million toward employee compensation, primarily to provide a 3% performance-based pay raise and cover additional health care costs.
- $3.6 million to mitigate costs of renaming U.S. 1 as Richmond Highway. The funding comes from leftover money collected through the county’s recordation tax.
- Allocations toward services for people who are homeless, various trail projects and capping off part of the county’s landfill.
- $177,635 for an administrative assistant and analyst through the equity and inclusion program to perform data mapping and analysis of government services.
- $327,000 for the county’s new co-responder unit, which assists the police department during mental health crises. The team includes an emergency services clinician and a crisis-intervention certified police officer.
- Eliminating library fines, which will cost the county about $370,000 in revenue.
Budget Director David Sinclair said the hefty increase in the six-year capital spending plan comes as the county expects to start transportation projects in later years. In November 2019, 73.4% of county voters approved a referendum allowing the county to issue general obligation bonds to finance $355 million in road projects over eight years. The county can request an extension for two years.
Sinclair said the cigarette tax would help the county raise revenue for debt service on the projects.
Much of the funding in the capital budget for fiscal 2022 is to start design on projects that will be completed in later years. For example, among the capital proposals is $1.4 million to design a new fire station, which Sinclair said will probably be in the Potomac District in the Prince William County Parkway corridor.
The county opened the Groveton Station last year in the western part of the county, and Sinclair said officials believe another six firehouses are necessary to maintain service levels.
The capital budget provides the last bit of funding needed to wrap up an expansion of the county’s animal center and repairs at the Prince William-Manassas Regional Adult Detention Center.