Prince William County supervisors will advertise a potential 7% increase in real estate tax bills for county homeowners.
Early Wednesday morning, the Board of County Supervisors voted 5-3 on party lines to advertise the proposed tax rates for fiscal year 2022 for a public hearing.
Democratic supervisors Kenny Boddye, Occoquan District; Andrea Bailey, Potomac; Victor Angry, Neabsco; Ann Wheeler, At Large; and Margaret Franklin, Woodbridge, voted in favor of the rates. Republican supervisors Jeanine Lawson, Brentsville; Yesli Vega, Coles; and Pete Candland, Gainesville, voted against them.
County Executive Chris Martino has proposed a $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.
The board is not bound by the advertised rates. The advertisement only represents a ceiling, and the board can adopt rates lower than advertised.
The board’s discussion on the rates stretched past midnight. Republicans said higher tax bills would hurt struggling families during the coronavirus pandemic, while some Democrats said the budget provides vital services to people in need.
“This budget is so tone deaf to what is happening in our economy right now, in my opinion, we’re just so far off,” Candland said.
The real estate rate will be advertised at $1.125 per $100 of assessed value, but rising property values are expected to increase the average residential homeowner’s tax bill by $306, according to county staff.
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 residential properties, but a drop for commercial.
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.
Budget Director David Sinclair has said the real estate tax rate would need to drop to around $1.05 per $100 of assessed value to avoid the effective increase. 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.
Vega made a motion to advertise a real estate tax rate of $1.052 per $100 of assessed value. It failed on a party-line vote.
During public comment at Tuesday’s meeting, several people spoke about the tax rates. The speakers were relatively split both in favor of the proposed rates and against it.
While many of those who opposed keeping the tax rate flat because of the impact of the pandemic, Franklin noted that the budget provides vital services to those in need.
“I want to be careful when we say we have an irresponsible budget because there are a lot of people who benefit from this budget,” she said.
Franklin said if the county doesn’t keep the rate flat, it will be “hard-pressed to find revenue in other places.”
Lawson said the county is “overtaxing people” and has “a spending problem, not a revenue problem.”
The personal property tax, which primarily applies to vehicles, is advertised to remain at $3.70 per $100 of value.
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.
Angry said he didn’t support the increased tax rate for data centers, but voted to advertise the higher rate to start discussions.
“I don’t think just because the data centers thrive we should just arbitrarily go snatch a quarter,” he said.
Lawson said if Angry didn’t support the higher rate, the county should go ahead and advertise a lower one.
“What we put out there as an advertisement sets the tone,” she said. “I think this is a horrible time to pass a historic tax hike on homeowners. … Folks are hurting. People are still unemployed.”
Angry said he knew “what the optics look like on getting this set,” but the advertisement was necessary to start conversations on the spending plan.
Vega, who has mentioned increasing the data center tax, said lowering the levy on the businesses would essentially be the county trying to “bail out big tech.”
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 board will hold a public hearing on the budget during its March 9 meeting. The board is scheduled to adopt the budget in late April.