Higher Data Center Tax Rate, Lower Real Estate Tax In Prince William County Budget Markup

PRINCE WILLIAM COUNTY, VA — A higher personal property tax affecting data centers' and other businesses' equipment is expected to go up after budget markup by the Prince William Board of County Supervisors Tuesday. Meanwhile, the board moved to lower the real estate tax rate.

The Board of County Supervisors voted 7-1 to approve an increase in the personal property tax on business tangible computer and peripherals from $2.15 to $3.70 per $100 of assessed value with opposition from Neabsco Supervisor Victor Angry. Each nickel increase in the tax rate would generate an additional $1.765 million in revenue, county staff said.

A real estate tax rate of $0.92 per $100 of assessed value was approved by supervisors in the budget markup, which offsets most of the average tax increase from value increases. It is a decrease from the current $0.966 per $100 of assessed value rate, which was proposed in the county executive's budget. The fire levy paid on top of the base real estate tax is expected to remain the same at $0.072 per $100 of assessed value.

While the lower real estate tax rate takes away $21.1 million in revenue and the increased personal property tax adds $54.7 million, the estimated net increase to revenues is $33.6 million.

As Inside Nova reported, the Prince William Chamber of Commerce expressed concern about the personal property tax increase impacting thousands of small businesses. Supervisors acknowledged the personal property tax hike on business equipment affects small businesses.

"I appreciate the discussion about small businesses and I don't want to seem like I'm just [insensitive] to them," said Occoquan District Supervisor Kenny Boddye. "I have talked to a few small businesses and small business owners who live in my district. And frankly, they have told us hey, if you scale back their real estate tax rate while doing the $3.70 [personal property tax], they're more than happy to pay a little bit more knowing that again, the data says we'll be paying their fair share."

Woodbridge District Supervisor Margaret Franklin argued not all of the thousands of small businesses may support the increase. She introduced a directive to have the county push for more flexibility from the Virginia General Assembly on allowing waivers and exemptions for collecting taxes.

"I'm going to support this measure, but only because I want to make sure that those small businesses in some way are addressed and taken care of at least in the long term," said Franklin.

Brentsville District Supervisor Tom Gordy said he supports Franklin's directive and noted the personal property tax has a depreciation schedule that alleviates the burden on small businesses.

I think offering our small businesses a real estate tax break, which is something more permanent, something more consistent with the $3.70, the impact will diminish over time," said Gordy. "It may be looking at ways that we continue to support our small business, but I think that tying it in with a real Estate reduction is also going to help them."

Beyond the tax rate approval, supervisors indicated they would have discussions on how to use additional revenue in the budget markup. One of those priorities for some supervisors is funding for Prince William County Public Schools.

"I do want to give schools money, and I want to make clear that that's also one of the reasons why I'm very interested in going to $3.70," said Chair Deshundra Jefferson.

"There is no way in the world in which I think we should be going to $3.70 without making sure and guaranteeing that our schools don't get their fair share of this cut," added Franklin. "The schools are probably one of the most important entities that we have ,and certainly guaranteeing that they have their share that we've agreed to — 57 percent to be exact — is something that I think is incredibly critical."

"Our children need the support in terms of their academics, because of COVID," said Potomac District Supervisor Andrea Bailey. "So I think really talking about the importance of the revenue share agreement, how we utilize that in detail going forward is very important."

Final budget adoption is set for the April 23 meeting from 7:30 p.m. to 10 p.m.