Loudoun County became the latest county in Northern Virginia to find out that it faces budget shortfalls thanks mostly to the declining real estate market:
Not that more evidence was needed, but the bad housing market continues to create havoc on local economies as Loudoun County officials said they are projecting a budget shortfall next year of $251 million.
The announcement came during a briefing of new members of the Board of Supervisors in Leesburg Dec. 12, where county officials said property values in Loudoun are forecasted to drop another nine percent over the next two years. They decreased 10 percent from 2006 to 2007.
It’s difficult to overstate the importance of real estate values on the county budget. In the budget approved by supervisors last spring, taxes from real estate accounted for 72 percent of all county revenue, most of which is used to fund school projects and programs. School spending next year is projected to increase 17 percent.
County Budget Manager Ari Sky told supervisors a tax rate of somewhere around $1.24 of $100 of the assessed value would be needed to eliminate such a shortfall. The current rate is 96 cents.
The days of Northern Virginia living high on the hog of rapidly rising real estate values are, quite clearly, gone.
December 13th, 2007 at 1:05 pm
If this doesn’t serve as a testament to keeping government spending in check during good financial times, I don’t know what will. Seriously: As Virginians, we should *expect* our counties to tighten their SPENDING BELTS during downturns in the same manner that we ourselves would do in the same situation, not allow them to use financial hardship as an excuse to increase tax rates to recover “lost” revenue.
Every NOVA county affected by this needs to immediately start asking itself what programs it can survive without.
MHO, of course.
Regards,
Brian