Prince William supervisors back big data center tax hike

On Tuesday, the supervisors moved to advance a 70% increase in the tax rate that data centers pay on their computer equipment while cutting the real estate tax rate to 92 cents per $100 in assessed value. The latter cuts the tax bill increase on a home valued at about $500,000 to $26 from the initially proposed $243, according to Nikki Brown, a Prince William County spokeswoman. 

Seven of the eight board members signaled they would vote next week to raise what is known as the “computer and peripheral tax rate” to $3.70, up from the current rate of $2.15 per $100 in assessed value. The move would add $54.7 million to the county’s coffers, which includes an extra $19.1 million for Prince William County schools. 

Only Supervisor Victor Angry, D-Neabsco, said he was against the move. 

“Right now, some of the richest companies in human history are receiving a tax break in this county,” said Supervisor Kenny Boddye, D-Occoquan. “We no longer need sweetheart deals to attract this industry. They are here; they are maturing; they’re going to be here to stay.” 

All board members said they were in favor of shaving 4 cents off the proposed residential real estate tax rate. 

Several supervisors noted that data centers would benefit from the reduced real estate tax rate, just as all Prince William County property owners would. But others said it was time to directly give homeowners a break. 

“This is the only way I can see offering our residents a real tax cut — not just a slower rate of growth,” said Brentsville Supervisor Tom Gordy (R).  

The plan would use about $21.1 million of the $54.7 million in new tax revenue to offset the cost of cutting the real estate tax rate. 

Prince William County Schools would receive a 57.23% cut of the money under the county’s long-standing revenue-sharing agreement. In total, schools would receive an extra $23.6 million over and above the school board’s approved budget. The amount includes $19.1 million from the data center tax hike and an additional $4.5 million due to the county initially underestimating expected tax revenue. 

School Board Chairman Dr. Babur Lateef said he is not yet sure how the school board would spend the extra money and that they’d likely wait until the state budget is final before making any decisions. 

The board’s single largest new proposed expenditure — $9.2 million — was redirected to the Potomac and Rappahannock Transportation Commission, which runs the local and commuter bus system. The plan would provide extra money to help the bus system deal with a budget shortfall driven in part by declining fuel tax revenue. Still, the system will be left to deal with a $3.9 million funding gap. 

The budget plan would address a long list of other items, including boosting the county’s contribution to retiree health benefits, adding eight more positions to the Commonwealth’s Attorney’s staff and dedicating about 1.2 million to park maintenance projects. 

The plan would also dedicate an extra $3 million in each of the next two years to a new affordable housing trust fund, bringing the fund to $25 million over the next five years, among other changes. 

The supervisors will take a final vote on the budget on Tuesday, April 23. 

Reach Jill Palermo at jpalermo@fauquier.com