Prince William Proposes Residential Tax Bill Increase

With some signs that the country's economy is improving, most Prince William County residential landowners could see a larger real estate tax bill next year.

Prince William County staff recommended today a lower real estate tax rate for the coming budget starting in July, but the average homeowner's bill would still increase 3 percent. The proposed percentage increase is the same as last year, when the average homeowner paid about $93 more a year in real estate taxes, according to budget documents released this morning.

The real estate bills for commercial land owners would drop 9 percent, according to the proposed fiscal year 2012 budget.

If that proposed rate of $1.21 per $100 of assessed value is approved, the average tax bill for a county home owner would increase $99 a year or $8.25 a month.The total average tax bill would be $3,209.

The real estate tax rate now is $1.23 per $100 of assessed value, which means the average bill is about $3,110.

County staff said the average tax bill is still about $228 lower than it was at the peak in fiscal year 2009 and $48 lower than the bills in fiscal year 2007.

The proposed budget shows $857,831,862 in total expenditures to the school system, with more than half of that in local funding. The total school population is now at about 79,115, up almost 7,000 students since the 2008-2009 school year—an 8.9 percent increase over the past three years. In the current budget, the school system was given a total of $845,129,376.

The county supervisors are facing several operating issues that require additional money to fund in a county that has seen a 6.2 percent growth rate in population over the past five years. 

The workload for Social Services has seen a significant increase because of the several years of a bad economy. The sheriff's office needs additional funding to transport mental health patients. And the supervisors are facing staffing needs in public safety with police and fire and rescue.

Although there is a residential tax bill increase proposed in the budget, county staff pointed out that county supervisors have cut previous budgets with a heavy hand.

The average real estate tax bill this year was 10 percent less than at the peak in fiscal year 2009. A total of $143 million was cut from the budget in this recession. Staff said every area of the local government was slashed. Bond projects and borrowing money was delayed in the five-year capital projects plan and salaries have been frozen for two years, which has saved $75 million.

The fiscal year 2012 budget proposes a 2-percent merit increase for employees, costing $2.8 million.

Staff's revenue predictions were conservative and turned out to be very accurate. County supervisors also reduced the fire tax and fees for stormwater and solid waste remained flat.  Staff also showed a graph that highlighted that the county has a real estate tax bill that is up to almost 30 percent less than in Fairfax, Arlington, Loudoun and Alexandria.

The county continues to have a AAA bond rating, which means the county will get the lowest interest rate on any borrowing. There remains $310 million in approved bonds that have not been issued. Most of that money—$244 million—is for road projects. Not only does the county benefit from lower interest rates, but the recession has resulted in projects bids coming in much lower than the engineering estimates. The budget presentation today stated that there is no better time to invest in infrastructure.

The real estate tax rate will be advertised on March 1. Once the rate is advertised, the supervisors cannot increase it unless they start the entire process over; they can lower it and for tax bills to remain level, the tax rate would have to be $1.145, according to budget documents released this morning.

There will be budget work sessions and hearings in March and April.

The supervisors are scheduled to adopt the budget on April 26.