The Prince William Board of County Supervisors voted Tuesday to support gradual increases to the tax rate on the county’s data centers over the next few years, saying the growing industry needs to start providing more revenue for the county’s coffers.
The resolution, brought by Board Chair Ann Wheeler, a Democrat, sets a goal of raising the tax rate on data centers to $2 per $100 of valuation by the 2025 fiscal year.
The board voted April 27 to increase the business tangible property tax rate for computer and peripheral equipment, which is primarily paid by data centers, by 15 cents to $1.50 per $100 of value in the fiscal 2022 budget, which begins July 1.
Wheeler’s resolution pledges the board to increase the rate by 15 cents each in fiscal 2023 and fiscal 2024. The levy would rise 20 cents in fiscal 2025 to reach $2. That would represent a total increase of 48% over the current rate of $1.35.
The resolution and tax rates set out are not binding for the next four years, and the board will still have to formally adopt all future tax rates after public notices and hearings. What it will do, though, is direct County Executive Chris Martino to include the rates in his future budget presentations. Then, the board can adopt the rates set out or change them again.
Supervisors said that even though the resolution isn’t binding, it would offer more predictability to both data center owners and Martino’s office when it prepares its budgets. Republicans and Democrats on the board have said it’s part of an effort to make sure that the data center community is “paying its fair share” of the county’s tax burden.
“Obviously after four years, if for whatever reasons we reassess, we can have discussions about where we want to go,” Occoquan Supervisor Kenny Boddye said Tuesday. “But I think it gives [Martino’s office] some fiscal predictability, because I didn’t necessarily like how we advertised a rate and then went down on it at the very end of the budget season; that causes us to scramble to find savings to balance the budget. So I think this helps give everyone a little more certainty.”
Gainesville Supervisor Pete Candland and Brentsville Supervisor Jeanine Lawson, both Republicans, were the only two votes against the resolution, which passed 6-2. The other Republican supervisor, Yesli Vega of the Coles District, voted for it.
Lawson didn’t take a position at the meeting, while Candland said that even though supervisors could still raise the rates down the road, doing so would hurt the board’s credibility.
“I believe that the schedule should be much more aggressive, and I think I’ve been very clear on my concern that the data center community is not pulling their fair share of the tax bill here in Prince William County,” Candland said.
The board plans to hold a work session on the matter of data centers that would bring various stakeholders to discuss things like tax rates and land use in the future, but specifics have not been finalized.