PW Chamber of Commerce Asks Supervisors to Reconsider Tax Rate

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Proffers are money developers pay to the county when they build new homes. It helps the jurisdiction pay for services for new residents. The Prince William Chamber of Commerce believes the residential tax rate should not be aligned with the consumer price index.

The Prince William Chamber of Commerce has written a letter to the County Board of Supervisors asking them to adopt a higher residential property tax rate that is not based upon the consumer price index (CPI-U) in order to attract new businesses to the county, provide needed services to the residents and keep pace with county growth.

Below is a copy of a letter the letter sent by the Chamber.

February 24, 2015

Dear Prince William Board of County Supervisors:

The Prince William Chamber of Commerce (the Chamber) applauds Prince William County on its strong economic recovery. Prince William County has seen home values return to near pre-recession levels, maintained an unemployment rate lower than both the national and state averages, experienced the largest increase in median household income in the region, and is successfully expanding the commercial tax base to reduce the tax burden on homeowners.

To continue to grow our business community and expand the commercial tax base we encourage the Board of Supervisors to develop a budget based on its previously adopted strategic plan that takes in to consideration multiple economic indicators and addresses the needs of the county as expressed by residents. Without this type of consistency in policy we are concerned that Prince William County is not sending the appropriate message to attract new businesses to our community and is potentially inhibiting future economic growth.

The Chamber urges the Prince William Board of County Supervisors to avoid setting the precedent of using the consumer price index, or CPI-U, as its primary basis for budgeting. As proposed the 1.3 percent increase falls short of funding Prince William County’s stated strategic plan priorities and does not accurately reflect the state of our local economy.

We commend the Board’s efforts over the weekend to restore funding for many items in the budget and hope you will continue to make progress towards a budget that more closely aligns with your strategic plan. Please review our commentary below on the budgetary process to date for a more in depth look at our concerns. We appreciate your consideration of this matter.

The CPI-U used to set the 1.3 percent increase in the average residential tax bill by the Board of Supervisors was determined using data from November of 2014. By December 2014 the CPI-U plummeted to .8 percent due largely to the low price of fuel. The Bureau of Labor Statistics called the 2013-2014 December to December .8 percent increase the second-smallest in the past 50 years.

In the past decade the CPI-U has been as high as 5.6 percent in July of 2008 and as a low as -2.1 percent in July of 2009. Due to the volatility of US commodity markets and the effect that these market prices have on the CPI-U, the Board should not set the precedent of tying the CPI-U directly to the county budget but should consider multiple economic indicators. If the CPI-U is to be considered as a component of the budget development process the CPI-U less fuel and food should be given greater consideration than the full CPI-U due to its greater resistance to volatility.

According to the Metropolitan Washington Council of Governments, Prince William County's population is projected to grow by nearly 70,000 residents by 2020 and is one of the fastest growing localities in the Commonwealth. As the second largest school system in the state by enrollment we also have one of the highest rates of new student entry in to the school system. When considering these facts along with the rate of inflation and other market indicators, it is clear to see that a 1.3 percent increase in the average residential tax bill or a 1.1 percent increase in overall spending does not keep pace with the needs of our growing community.

The 2014 Prince William County Community Survey indicates that residents are overwhelmingly happy with overall services and the value of their tax dollar. The survey also stated that a majority of respondents agreed that county services and taxes should remain the same. On its own, this statistic may lead one to believe that taxes and services should remain constant. However, when you look at the survey results for the top priorities of Prince William County over the next two years you notice that of the 1,831 respondents only 31 said that they would like to see less spending - a decrease in the total number of respondents in favor of less spending from 2012. That is nearly the same number of residents who stated that they would like an increase in community swimming pools. Only 137 respondents indicated that their taxes were currently too high or they would like to see a reduction in taxes.

Citing the community survey once more, the top two priorities for the Board of Supervisors according to respondents, should be first transportation and second, education. Very little is done and very little can be done to address these two major issues within the current budget proposal. While the state provides much of the funding for major roadways and the newly formed NVTA assists with the funding of secondary roads, VDOT and NVTA do not complete the entire funding puzzle. Many local projects remain unfunded by the county increasing congestion on already crowded roads as the population grows. In addition, our public transit system (PRTC) is facing a looming shortfall that could result in significant loss of service by 2017, further adding to congestion and curtailing the options for workers to get to their jobs. While the county has benefited from a small surplus created through savings on fuel prices, transit funding issues have been compounded due a lower than expected motor fuel tax yield. The motor fuel tax yield is currently $16 million dollars less through 2020 than originally projected last year.

The 1.3 percent budget guidance does provide a slight increase in revenue to the Prince William County School Board but it is a drastic decrease in funding from what was originally proposed by the Board of Supervisors at the end of 2014. This has forced the School Board to find $112.1 million in savings over the next four years. To provide context, a reduction in class size of one student per class on each grade level would cost approximately $15 million.

To meet the new budgetary demands, the school system could be forced to delay many capital improvement projects adding students to the county's already overcrowded classrooms. Using Battlefield High School in Haymarket as an example – already one of the most crowded schools in Prince William County, may, if all things remain constant, have 15-20 trailers by 2019.

Exempted from any budget cuts were the police, fire and rescue, the Sheriff's office, public safety communications, the library system, and child protective services. The intentions of the Board of Supervisors here are good however, the proposed budget does very little to support these services and forces the county to find $87.2 million in savings over the next five years from only 31.5 percent of the remaining budget that is not exempted from cuts.

We encourage the board to take these factors in to account as the budget is in the development process. We also ask the board to remain focused on consistent policies that will signal to new businesses that the county is looking towards the future and willing to make the necessary investments to continue on its path to success.

On behalf of our 1,500 members and their 70,000 employees we appreciate your consideration of this matter and thank you for your service to our community.

Sincerely,

Debbie J. Bennett                                                      Deborah L. Jones

Chairman                                                               ��     President & CEO

Cc: The Honorable Maureen Caddigan

The Honorable Pete Candland

The Honorable John Jenkins

The Honorable Jeanine Lawson

The Honorable Michael May

The Honorable Martin Nohe

The Honorable Frank Principi

The Honorable Corey Stewart

This is a letter to the editor and does not necessarily reflect the opinions of Bristow Beat, our staff or sponsors. This is not a sponsored post.

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