On April 7, the Loudoun County Board of Supervisors set the 2009 tax rate at $1.245 - an increase of 10.5 cents over 2008. Because the average residential property value declined 14.6%, the average tax bill will be slightly lower this year. However, because changes in home values varied so wildly throughout the county this year, approximately 18% of homeowners will be paying higher taxes. Figure 1 clearly depicts that property taxes are still as inflated as housing values were during the housing bubble. Although the average homeowner has lost over $127,000 in equity since home values peaked in 2006 at $526,111, the tax rate has been raised sharply to keep taxes high.
Because the average commercial property value remained nearly flat, those tax bills will rise nearly 9%! The average commercial property tax bill has risen sharply in recent years:
The Loudoun County Public Schools operating budget continues to be above what has been needed to keep pace with enrollment growth and inflation over the years. See "Loudoun Schools Budget Overfunded $147 Million" for details.
The Loudoun County general government operating budget also continues to be above what has been needed to keep pace with enrollment growth and inflation over the years.
Some supervisors have suggested moving the planned opening of the HS-6 high school in Ashburn forward in the CIP by 2 years. Such a move would add $65 million to the county budget over the next 5 years (See table 1 for details) and require supervisors to add $3 million for architecture and engineering costs to the proposed FY 2010 budget that already calls for a 15 cent increase in the property tax rate. It would also result in 3,321 empty seats in Leesburg/Dulles area high schools in FY 2013.
Most of the $65 million cost is for 2 additional years of operating expenses. The base cost of operating a high school is substantial because the administration and support staff, as well as most of the teaching staff are hired immediately. Class sizes tend to be small for a high school at half-capacity. Per-pupil operating costs decline as enrollment increases. Empty seats are very costly and need to be minimized.
Adequate Capacity without HS-6
With the opening of Tuscarora High School in the fall of 2010, and HS-7 planned to open in the fall of 2012, the group of high schools serving the Leesburg/Ashburn area will have more than enough capacity. See table 2 for details. There appears to be no need to open HS-6 ahead of schedule.
Ideally, a school system should operate at an average capacity utilization of 95% to 105% to deliver good taxpayer value. If HS-6 is moved forward by 2 years, and HS-7 remains on schedule, average utilization for the Leesburg/Ashburn area high schools will drop to an unacceptable low of 77.8% in FY 2013. Even without HS-6, average utilization would still only be 88.4%.
There is some debate about what is the true capacity of a high school. LCPS determines program capacity based on a 90% utilization rate of available classrooms, with 23 students per regular classroom and a varying number of students for special size classrooms. As an example, Stone Bridge High School has 76 regular size classrooms and 5 special size classrooms with 10 students apiece. That totals 1,798 students, but at a 90% utilization rate, capacity drops to 1,618 students.
Stone Bridge enrollment is currenly at 1,839, or 221 students over the listed capacity. That means the average class size has increased by 1 to 3 students and/or classroom utilization is above the 90% target. Obviously, there is some extra capacity built into the official capacity figures. Is Stone Bridge so "overcrowded" that the quality of education is degraded? Would a high school class size of 26 students be considered excessive by most educators, parents, or students?
While operating above capacity is not the ideal situation, nobody appears to be complaining. In the March 18 meeting with the BOS finance committee, the LCPS superintendent and school board chairman commented on the matter. Apparently, a high school like Stone Bridge can operate over capacity (1,800 to 1,900 students) in the short-term as long as there is not a large number of special-needs students. The community would prefer that over another boundary change. Ashburn Farm residents have already been subjected to 18 school boundary changes in the past 20 years. In the long-term, when the area is built out and all the planned high schools have been built, ideal capacity will be achieved. Temporary overcrowding in some schools is a growing pain and can be mitigated with temporary classrooms. Broad Run now has 9 such classrooms.
The Future of HS-7
According to the proposed FY 2010 CIP, HS-7 (funding approved by voters in November 2008) is scheduled to open in Fall 2012, which is one year later than what the FY 2009 CIP called for. It is important to note that a site has still not been acquired by the county. As has happened in the past, the timeline for any school can be changed at any time. There is no guarantee HS-7 will be built within the current timeline. A budget crunch may necessitate moving it back one or more years. With the extra capacity provided by moving HS-6 forward, could the HS-7 timeline be moved back, again?
As usual, school employees and frightened parents were out in full force at the budget public hearings, demanding full funding of the school budget and adoption of the unprecedented $1.29 tax rate. The disproportionate showing was to be expected considering the vast networking resources Ed Hatrick has at his disposal. The newest LCPS resource is the Connect-Ed phone messaging system which is supposed to be used to communicate with parents about emergency situations, school events and important issues affecting their child. If you have a child in LCPS, you received a message from the principal encouraging you to attend Hatrick’s dog and pony show at your local high school touting all the great programs in his budget that are absolutely necessary, but may be cut if funding is reduced. You also received a message from Wade Byard, LCPS public information officer, about the budget public hearings. It was a misuse of taxpayer money.
Where were the majority of taxpayers who want substantially lower taxes? You know, the ones who voted down the meals tax by 70% of the vote (despite promises that the money would be spent directly on schools) and approved the school bond referenda by historically slim margins last November. Did they think someone else would show up?
Even though the county has announced that homeowners will get an average 3.2% property tax reduction - not much considering the average residential assessment went down by 14.6% - at the $1.29 rate, a TAG ("15 Cent increase") analysis of the assessment data found that over 30,000 homeowners, or one third of the county, will actually pay higher taxes at that rate. That is because the change in assessments from 2008 to 2009 varied so wildly from neighborhood to neighborhood across the county. In general, higher value homes, such as single family detached homes, held their value better (in the opinion of the county assessor) than townhomes and condos. Those who already pay the most will be paying an even greater share in 2009! Is this the county’s version of spreading the wealth around?
The county budget is fat. Spending is now $300 million higher than what was needed to keep pace with growth and inflation since the FY 2000 budget. See the TAG website for details. There is no reason to raise the $1.14 tax rate. Let’s face it, if the board does not get spending under control during this economic downturn, they never will. When the real estate market rebounds, the out-of-control spending will resume, and the average tax bill will soon be 5 figures.
The FY 2010 budget will be adopted in a few weeks. Time is running out. Taxpayers need to show strong support for a lower tax rate by emailing their supervisors (BOS@Loudoun.Gov) and attending the budget input session, hosted by Susan Buckley, at the Cascades Library this Saturday, March 7 at 9am.
30,000 Loudoun Homeowners Face Higher Taxes
Over 30,000 Loudoun homeowners, or approximately one third of the county, will see their 2009 property tax bills increase, if the $1.29 tax rate is adopted.The county has reported that the average homeowner tax bill will decrease by 3%, but the change in assessed values from 2008 to 2009 varied so wildly from neighborhood to neighborhood across the county (table 1) that few homeowners will be at the average. Even at a $1.21 rate, over 9,500 homeowners will see their 2009 property tax bill increase.
Table 1 indicates that the more expensive properties (generally, single family detached homes) tended to hold their value better (in the opinion of the County Assessor) than lower end properties, such as condos and townhouses.As a result, homeowners who already pay the most in property taxes will be paying an even greater share in 2009.Loudoun County has real estate tax, assessment, and parcel data available to the public on their website @ www.co.loudoun.va.us.
Loudoun County Administrator Kirby Bowers has proposed a real property tax rate of $1.29 for 2009. That is 15 cents higher than the current rate of $1.14, which is already the highest rate of any county in Virginia! In fact, the average state-wide tax rate in 2008 was only 59 cents. Because the average homeowner assessment has dropped by over 14%, from $465,480 to $398,335, the average tax bill would drop from $5,306 to $5,139. But, many homeowners did not experience such a large drop and will be paying higher taxes at the $1.29 rate!
Such a small reduction in taxes is not what taxpayers expected after such a large drop in property values. In fact, since residential assessments peaked in 2006 at $526,111, values have dropped a total of $127,776, or 24%, but tax bills will increase a total of $457, or nearly 10%, if the $1.29 rate is adopted! Raise your hand if you think that is fair. After years of the Board of Supervisors using rising property values as an excuse to raise taxes, homeowners expect taxes to drop as much as assessments have.
While residential assessments have plummeted, commercial assessments remained stable – dropping less than 1% from 2008. A 15 cent increase in the tax rate will mean a huge tax increase for existing businesses. The BoS should be doing everything they can to expand the commercial tax base by attracting new businesses. What business is going to want to locate in LoudounCounty knowing that high taxes will raise their cost of doing business and eat into their profits?
The net worth of almost all Loudoun homeowners has declined sharply in recent years. According to the revaluation statistics in the county assessor’s annual reports, the cumulative drop in residential property value here in LoudounCounty has been $12.9 billion since assessments peaked in 2006! In addition, the stock market has lost trillions of dollars of equity in the past year due to the shaky economy and the global financial crisis. Most taxpayers are relying on 401k plans for retirement and are heavily invested in the market. They have watched a large portion of their retirement nest egg disappear. School and county employees, on the other hand, have a guaranteed defined-benefit pension plan through the Virginia Retirement System that they do not have to contribute a penny to. Their retirement has not been affected by the recent market downturn. Must be nice!
To ask taxpayers to pay unreasonably high taxes in these times of economic hardship adds insult to injury! After the unprecedented rise in our taxes during the housing boom (see figure 1), we deserve a major tax cut this year!
A decade of excessive spending
Taxes are too high because the county has been on a spending spree this entire decade. The school budget has increased by $219 million over what was needed to keep up with enrollment growth and inflation (see figure 2) and the general county budget his increased over $100 million more than what was really needed (see figure 3). Yes, the proposed budget will slow the rate of spending in FY 2010, but not nearly enough. Taxpayers must put this budget in perspective by taking into consideration the massive over-funding that has occurred this decade. The budget is fat. Message to the Board of Supervisors: lower spending and lower the tax rate, please!
High Personnel Costs
A significant amount of excess spending can be attributed to a large increase in staffing levels this decade (see figure 4). Loudoun County Public Schools appropriated 8,527 Full-Time Equivalent (FTEs) positions in FY 2009. Increasing staffing ratios from 127.3 to 149.6 per 1,000 students may not appear excessive, but if staffing levels had remained constant since FY 2000, there would be 1,271 less employees in FY 2009! The general county government appropriated 3,448 FTEs in FY 2009. If staffing levels had remained constant since FY 2000, there would be 391 less employees in FY 2009!
Fight high taxes in 2009 - Maintain the $1.14 tax rate
If you are tired of paying high taxes for wasteful government spending, and would like to see your tax bill decrease as much as your property values have, then you need to:
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