Number One in Growth

Number One in Growth

How will county pay for infrastructure needed to support growth?

Loudoun County’s new status as the fastest growing county among the nation’s 3,066 counties emphasizes the challenges that have defined debate over services, taxes, zoning, proffers and other key elements of local government.

Loudoun's population rose from 169,599 in April 2000 to 221,746 in July 2003, according to the U.S. Census Bureau's latest figures.

Another 38,500 residential units have received construction approval and are in the pipeline for construction. The county has been adding about 5,000 new residential homes to the tax base each year since 1998. More applications for development go before the Planning Commission each month.

With a population growth of 52,147 people, the number of commercial businesses, gross wages and construction permits also has risen. Businesses and residents have paid more in real estate taxes, and the need for services has increased.

The average price of a residential house jumped from $251,703 in 2000 to $351,301 in 2003. The average price of a home last month was $394,766. Bill Gardner, county assessor, said the average tax bill for commercial property with a structure on it was $20,506 this year. The average residential tax bill was $3,653.

"On the good side, Loudoun has become an important destination for people to work and to live. That speaks well for the high quality of life we have," said Randy Collins, president and CEO of the Chamber of Commerce. "On the downside, I would say the county is obviously struggling to provide services to the many, many people who are moving in and also to do it without increasing taxes. It is a dilemma."

"Loudoun County is drowning in its own prosperity," Gardner said.

One indicator has declined. Businesses paid fewer taxes on their equipment in 2003 than in 2002 or 2001.

Bob Wertz, Loudoun Commissioner of Revenue, attributed the change to a number of bankruptcies in the telecommunications and information technology industry.

"When the .com bubble burst, there was a glut of data center equipment on the market and no one to buy it," he said. "There were bankruptcies as well. That equipment might have been picked up for pennies on the dollar, which reduced the value of the property."

Taxes were calculated on the basis of how much the equipment actually cost and the year of purchase. The value of equipment belonging to the businesses that survived also declined because of the glut, he said. "I guess it happens in localities when they put a lot of emphasis on technology."

Meanwhile, the number of commercial businesses grew 5.8 percent, from 5,330 in the second quarter of 2002 to 5,637 during the same period. Wertz said the county generally doesn't benefit much in terms of taxes from commercial development, because the employees' income taxes go to the state.

Tricia Hankinson, data research analyst for the county Department of Economic Development, said wages grew 6.9 percent between the second quarter of 2002 and the same period in 2003. There were $1.17 billion in gross wages in 2002 and $1.26 billion in 2003.

The number of new residential permits rose from 5,976 in 2002 to 6,667 in 2003.

"Unfortunately, being number one, even number two or three as we have been in the past eight years, puts a tremendous fiscal strain on the county resources and on the backs of taxpayers," said Scott York, chairman of the Board of Supervisors. "We've had to build 28 schools in the last eight years, and we'll have to build 23 more in the next six years.

Bruce Tulloch, vice chairman of the board, said the growth presents a number of challenges. "That's why having the right management team in place is key," he said, referring to the Board of Supervisors. "We need to do the right thing for the people to make sure they have the schools and the services they need."

The supervisors need to get developers to provide proffers up front before construction begins, Tulloch said. Recent applications for development, however, have proposed proffers millions of dollars less than guidelines passed last year. [See related story below.]

York said developers should be paying impact fees, but Tulloch said the General Assembly has refused to approve a measure providing for that. The proffers are the best remedy, he said. Developers sometimes offer to pay for roads or land when they are trying to get permission to build. The offer to pay is called a proffer.

Dr. Edgar Hatrick, superintendent of schools, said the county has been able to keep up with the growth because teachers, parents, school staff and others have insisted on quality education. Student population has grown from 14,632 in 1980 to 31,804 in 2000 to 40,751 in 2003.

Loudoun has improved instructional programs and built enough schools to deal with the student influx, Hatrick said. "If we can be #1 educationally and also be #1 in growth," he said. "I think that is a huge credit as to the value this community places on public education."