Data Center Revenue Contributes To Tax Rate Cuts In Latest Loudoun County Budget Proposal

LOUDOUN COUNTY, VA — Lower real estate and car tax rates are in the latest budget proposal from Loudoun County Administrator Tim Hemstreet, an impact of higher data center revenue to the county.

Hemstreet presented the fiscal year 2026 budget proposal to the Loudoun County Board of Supervisors Wednesday. The proposed operating budget totals $4.7 billion, which includes $2 billion for Loudoun County Public Schools.

The budget proposes a real estate rate of $0.805 per $100 of assessed value, which would be a six-cent reduction from the current $0.865 per $100 of assessed value. It is also one cent below the equalized rate of $0.815 that would keep the average homeowners' tax bill flat. The county estimated the average tax bill for existing homes would decline from $6,337 in the current tax year to $6,280.

In addition to a lower real estate tax rate, the budget proposes a personal property tax rate on vehicles of $3.48 per $100 of assessed value. The proposed general personal property tax rate is $4.15 per $100 of assessed value, which would remain the same.

The county administrator attributed the lower tax rate proposals to data centers, which had a significant growth in the county's tax base this year.

"While this budget’s rate of growth is higher than the county’s average, it is affordable even within a budget that proposes the most significant tax rate decreases in at least the past decade, said Hemstreet. "We can accommodate this largely because of increased revenues associated with the data center industry, which now generates 38% of all general fund revenues."

Hemstreet's presentation to the board noted the data center growth is not expected to continue at the same level and recommended the board not lower the rate more than the proposed six cents.

The budget also accounts for priorities like employee pay, opening of new facilities, an increase for LCPS, and other Board of Supervisors and county department priorities. Pay increases aimed at maintaining regional competitiveness account for a $24.7 million increase in the budget proposal. General county employees would receive a 4 percent merit increase. Fire and rescue employees would get a 2.5 percent salary scale adjustment and step increase, resulting in an average pay increase of 5.5 percent. Sheriff's deputies would receive a 5 percent salary scale adjustment and step increase, which equates to an average pay increase of 8 percent. In addition to pay increases, the budget would create 240 new positions in 30 departments.

LCPS would receive a fully funded request from the proposed county budget, with a $123.4 million increase in the county transfer. The Loudoun County School Board adopted a $1.96 billion budget last week and will present it to the Board of Supervisors at 6 p.m. on Feb. 24 at the LCPS Administration Building.

The budget will provide $47.7 million for the Revenue Stabilization Fund, which the Board of Supervisors created in 2023 to protect the county from potential fluctuations in data center tax revenue. The goal of the fund is to save 10 percent of annual real estate and business personal property tax revenues from data centers. The fund currently has $80 million, and a $47.7 million contribution would put it slightly above its 10 percent goal.

The proposal allocates $17.3 million to fund affordable housing, which comes from one cent of the real property tax rate.

Along with the operating budget proposal, Hemstreet proposed an updated 2025-2030 capital planning budget of $3.8 billion. Transportation projects account for the largest share — $1.2 billion in road projects, $177 million in sidewalks and trails projects, intersection improvements ($96 million) and $72 million in transit projects. School projects account for $1 billion of the six-year capital planning budget, while general county projects make up $1.3 billion.

The Board of Supervisors will determine the final tax rates and budget. The public can provide input through a public input session at 9 a.m. on Feb. 22 and public hearings at 2 p.m. and 6 p.m. on Feb. 27. Final budget adoption is expected on April 1.

All meetings are held in the Board Room of the Loudoun County Government Center, 1 Harrison St. SE in Leesburg. The public input session, public hearings and budget work sessions also be available virtually through Comcast Government TV Channel 23 and Verizon FiOS Channel 40 and streaming live at loudoun.gov/meetings.

The full budget proposal is available on the county's budget website.