Potomac News Online | Budget proposal includes real estate tax rate cut

Prince William County’s proposed fiscal year 2006 budget includes a 14 percent cut in the real estate tax rate, but most homeowners will still pay higher taxes since the value of homes rose by an average of 23 percent over the past year.

On Tuesday, county executive Craig Gerhart unveiled the tax-rate reduction for the Board of County Supervisors as part of his proposed fiscal year 2006 spending plan.


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The plan includes a 14.6-cent reduction in the real estate tax from $1.07 to 92.4 cents. The fire levy would drop from 6.6 cents to 5.69 cents in Gerhart’s proposal.

Board Chairman Sean Connaughton, R-at large, applauded the proposed tax reduction saying it will “probably be the most dramatic reduction of any jurisdiction in Northern Virginia.”

Connaughton added that the reduction “puts us at the lowest point we’ve ever had in our history.”

Gerhart said that over the last five years the county has reduced its tax rate faster than neighboring jurisdictions. The reductions mean that Prince William County residents now pay a lower share of their income in taxes than other Northern Virginia counties.

However, Gerhart warned supervisors that the cost of providing public services for a growing population could be endangered if tax rate cuts continue.

“At some point, we have to keep our eye on whether we are inexpensive, or just cheap,” Gerhart said.

Along with the fiscal year 2006 budget, Gerhart presented a five-year spending plan that outlined a deceleration in tax-rate cuts and a slight tax rate increase by 2010.

Gerhart said property values in the county may climb more slowly in the next five years, forcing supervisors to abandon their recent spate of tax cuts. Since 2000, real estate tax rates have dropped from $1.36 to $1.07 in 2005.

Tax rate cuts have been possible since — even with lower tax rates — higher-priced homes bring in more tax income for the county.

The average residential assessment this year surged 22.9 percent, from $266,502 in 2004 to $326,800 in 2005. Property owners pay $924 in real estate taxes for every 100,000 of assessed value.

For the average home — now worth, $326,800 — this year’s tax bill will be $4,444 or $168 more than last year’s. New assessments will be mailed to property owners in March.

Overall, Gerhart said his proposed fiscal year 2006 budget was in line with supervisors’ desire to cap the average property owner’s tax bill increase at 5.9 percent. The average real estate tax bill in Gerhart’s proposal rises by 5.89 percent.

The fiscal year 2006 spending proposal totals $1.6 billion. The county will transfer 55.5 percent of its income to the school district, leaving $732.1 million for the county expenses.

Gerhart’s budget proposal also contains an aggressive program to recruit and retain police and fire & rescue employees.

The retention plan includes a $3,000 signing bonus for new police and fire & rescue employees, as well as an annual bonus worth 3 percent of their salary. After 10 years, the bonus would rise to 5 percent of the employee’s salary. Bonuses would be capped at $4,000.

Gerhart said the police department’s recruiting efforts have been hampered by competition from federal recruiting for the Office of Homeland Security. The police department has 21 officer vacancies.

Connaughton said low unemployment in the area makes it hard to recruit officers.

“We are in a very, very tight labor market and we have to look at ways of getting and retaining employees,” Connaughton said.

Gerhart’s proposal Tuesday begins an eight-week budget process that culminates in final adoption on April 19. The county’s budget season includes two public meetings on March 28 and 29.

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