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PW aims to lower real estate tax bills
Amid a storm of dark economic thunderclouds, a silver lining: Prince William real estate tax bills will go down next year.Final numbers are still months away, but on Tuesday, the Prince William Board of County Supervisors unanimously decided to create a budget that will ensure that the average homeowner's tax bill drops by about 18 percent next year.
And every homeowner will see their tax bills drop by at least 6.6 percent.
“Everyone in the community will receive a residential tax bill decrease,” County Executive Craig Gerhart said on Tuesday.
Eighteen percent pans out to about $600 off a homeowner's tax bill. Some owners will see a bigger tax cut and some less but everyone will get some savings. This year, the average tax bill was $3,420. Supervisors said their plan will mean that next year's average bill will be about $2,804.
State law forbids the board from setting separate tax rates for homes and businesses and since commercial assessments are rising, most businesses will see an increase in their tax bills. However, the board's plan is to ensure that businesses see no more than a 5-percent tax bill increase next year.
A tax rate will not be set for several months yet and the budget planning season doesn't really start until the beginning of 2009. Tuesday's vote was just to give Gerhart and his staff a starting point as they prepare the budget.
“What we're doing this evening is just guidance. This is not setting the tax rate,” clarified Dumfries Supervisor Maureen Caddigan (R).
The actual tax rate will be set in the spring, after new numbers come in on housing assessments. Right now, county officials believe assessments will be down 30 percent but it could be more or less.
“I frankly have my fingers crossed that it stays at 30 percent and doesn't drop further,” Gerhart said.
And the downside of the tax cuts is that they will come with “significant” budget cuts.
“The least we can do as a county government is to provide you some tax relief,” said Board Chairman Corey Stewart (R). “The flip side of that is it's going to require some fairly drastic and deep cuts.”
Gerhart and Stewart estimated that the tax cut will leave a $190 million hole in next year's budget. Of that, $108 million will come out of the school district's budget while $82 million will impact the county budget.
“We're working together. We're going to try to make this as pain-free as possible,” Stewart said.
But it's still going to hurt. Every department and agency, except for public safety, will have to cut 20 percent out of its budget. Some departments will lose significantly more. That means employee layoffs, no pay raises and possible benefit cuts.
It also means no new public safety employees or road bond projects next year and it will also likely result in extra fees for services.
“Everything is on the table,” said Neabsco Supervisor John Jenkins (D).
For instance, he said, the county doesn't currently charge a fee for ambulance service. That could change in the future, meaning that residents who call for an ambulance would be charged for the ride, although “we're not going to ever deny anybody a ride to the hospital or emergency treatment” if they can't pay, he added.
In localities that charge ambulance fees, the service is generally provided with no questions asked but the fee is later billed to the patient.
Some services will also be eliminated altogether or contracted out to private entities. The county has already done that with its troubled youth program, doing away with the county service and instead paying Youth For Tomorrow in Bristow to take on the county's clients. A similar plan closed the Manassas Senior Day Care program and contracted the program out to Hearth and Home.
Those decisions have been very controversial but they've saved the county money.
The board will discuss the budget again in February, when assessment numbers come in and a more concrete budget plan has been drawn up. But the bottom line for now is that residents can expect significant tax savings at the expense of significant service cuts.
“We're not going to make all of that go away without some service impacts,” said Gerhart.
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