By Adam Pagnucco.
While Montgomery County leaders debate raising property taxes for the second time in three years and the Maryland General Assembly is set to pass a large tax hike package, one Northern Virginia supervisor is bragging about her own county’s plan to pass a big tax cut. And here’s the kicker.
She’s a Democrat.
Meet Loudoun County Supervisor Kristen C. Umstattd. She is the former Mayor of Leesburg, a three-term county supervisor and a Democrat who has frequently given money to her party and other Democratic candidates. Democrats have a 7-2 majority on the Loudoun County Board of Supervisors and have controlled it since 2020. She is no DINO (Democrat in Name Only), at least according to the Loudoun County Republican Party.
Loudoun County charges a property tax rate of 86.5 cents per $100 of assessed value, and according to Umstattd, they are about to cut it to 80.5 cents. (Montgomery County’s weighted average property tax rate is $1.0255 per $100 of assessed value, excluding parking lot districts, and County Executive Marc Elrich wants to raise it by 3.5 cents to $1.0605.) Despite the tax rate cut, Loudoun County’s local tax funded revenues are still growing by 11% in FY26.
Cutting property taxes is not a new thing in Loudoun County. Back in 2016, their property tax rate was $1.145, much higher than MoCo’s. They have cut their rate every year since.
One reason they have been able to cut their tax rate while growing spending is that their economy is one of the best performers in the region – and on many measures is number one. MoCo is one of the least competitive, with only Alexandria trailing on most measures. Umstattd specifically credits much of the county’s revenue growth to its huge data center industry.
Umstattd discusses taxes and the economy in an email to constituents reprinted below. But first, a comment on her trolling of Fairfax County, which is considering increasing its property tax rate by 1.5 cents to $1.14 per $100 of assessed value. That’s higher than Montgomery County, but Virginia has lower income taxes and far lower energy taxes than MoCo.
And so Loudoun County leaders have figured out how to grow their economy and cut property tax rates for ten straight years. Will MoCo’s leaders ever figure this out?
Umstattd’s email to constituents, sent on Friday, is reprinted below.
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Subject Line: Leesburg District Newsletter March 2025
This coming Tuesday, at the April 1st Board of Supervisors meeting, we are planning to vote on the County budget, which will encompass our final decisions on tax rates. As you have heard, the Board intends to lower both the real property tax rate (from 86.5 cents to 80.5 cents per $100 of assessed value) and the car tax rate (from $4.15 to $3.09 per $100 of assessed value). If you live inside the Town of Leesburg, like I do, you will also be paying Town real estate and car taxes on top of County taxes. This article only deals with the County’s tax rates and tax bills.
The “average” homeowner will see a lower real property tax bill. Does that mean you will? That will depend on whether the assessment on your home increased more than the average assessment increase. That average assessment increase is about 7.453%. If your home’s assessed value between 2024 and 2025 went up more than 7.453%, you will see an increased tax bill, even though the Board will have lowered the tax rate. If your home’s assessed value went up less than 7.453%, you should see a lower tax bill. Because my home’s assessed value went up almost 9%, my family will see a higher real estate tax bill. However, if the Board wasn’t planning to reduce the real estate tax rate to below the “equalized rate” – the rate at which the average taxpayer would see no tax increase – my own tax bill would have increased by an additional $330 on top of the much lower increase that I expect to see.
The same scenario may play out for folks in relation to the car tax rate. Because, outside the supply chain challenges of the pandemic shutdowns, car values tend to decrease over time, unless you bought a new car with a higher assessed value, you should see a significant reduction in your car tax bill, when the new, lower rate kicks in.
For a family that owns two vehicles, each assessed at $25,000 (for a total value of $50,000), even if the assessed values of the cars did not decrease from one year to the next, that family would see their vehicle tax bill go from $2,075 to $1,545 – a $530 reduction on their combined car tax bills under the lower $3.09 tax rate. That’s almost a 26% decrease in the tax bill. If, however, your family replaced older cars with more expensive newer cars, that could actually increase the tax bill, despite the Board’s having significantly reduced the tax rate.
Whatever tax relief the Board is able to offer is almost entirely due to data center revenues. That revenue stream has allowed the Board to lower average tax bills, while funding schools, transportation projects, affordable housing, child protective services, mental health services, law enforcement raises, firefighters, parks, libraries, food banks, and millions of dollars for laid-off federal workers, etc. Without a robust data center industry, it is likely Loudoun would be in a position similar to the one that Fairfax County is in – looking at a $300 million budget shortfall and looking to increase the real estate tax rate to $1.14/$100 of assessed value. Fairfax County does not have as strong a data center presence as Loudoun has.
Let’s compare Loudoun and Fairfax. If you owned a $700,000 home in Fairfax, under that $1.14 proposed increased rate, you would be looking at an annual tax bill of almost $8,000. In Loudoun, that same $700,000 home would cost you about $5,600 in real estate taxes. In Fairfax, the vehicle tax rate is $4.57/$100 – already significantly higher than Loudoun’s current $4.15 rate, so a two-car family in Fairfax would pay $2,285/year, compared with the $1,545 a Loudoun family would pay when the $3.09 car tax rate goes into effect.
Back to data centers. How much of our county do they occupy? Loudoun County has a land mass of 515 square miles, which is about 14.3 billion square feet (1 square mile consists of 27,878,400 square feet.) Data centers, both existing and approved, would take up about 49 million square feet, which is less than two square miles and less than one percent (just over one third of one percent) of Loudoun’s land mass. So, less than one percent of Loudoun’s land mass is paying for 100% of the non-school side of the County budget, or, if you add in the schools to the County budget, the data centers are paying for 38% of the total budget, while occupying less than one percent of the county’s land mass.