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Preliminary Revenue Projections Presented to Board
Friday, 17 January 2014
| County News & Features | | | 0 Comments

​According to preliminary fiscal 15 revenue projections, housing values are up 7.5 percent from last year; commercial property values are up 2.5 percent; personal property values for fiscal 15 are up 0.5 percent and sales tax revenues for fiscal 15 are projected to be up 3 percent.

“It’s important to note that we are still going up in all these categories, just not as much as we thought it might,” said Chris Martino, Deputy County Executive. “It’s still excellent news as it relates to the economy, but it does pose some challenges with the fiscal 15 Budget.”
To provide sound guidance to the Board, the Finance Department projects future revenues through the Five-Year Plan, and updates those revenue projections to the Board quarterly during the current year and annually for years 2 through 5. Over the past five years, those revenue forecasts have had an average accuracy of 99.3 percent.
For fiscal 15, the second year of the Adopted fiscal 14-18 Five-Year Plan, projected growth in new housing units, commercial real estate, personal property and sales tax, will be lower than the original forecast.
However, the revenue source having the greatest impact on the fiscal 15-19 budget process is the unanticipated rapid increase in values of the residential housing market, which was projected to grow by 3.5 percent, but instead came in at 7.5 percent, as a result of enhanced demand for housing.
The Board of County Supervisors provided budget guidance on December 10, 2013, based upon the adopted fiscal   14-19 projected revenue forecasts. That guidance stipulated a 2.5 percent increase to the average residential tax bill from fiscal 14 to fiscal 15. As a result of the change in residential values, to develop a budget with this guidance, the real estate tax rate would have to be reduced 5.5 cents from the current rate of $1.181 to a new rate of $1.126 per $100 of assessed value.
In Virginia, municipalities are required to apply the same tax rate to residential and commercial properties. Prince William County budget guidance is based on the change to the residential tax bill. Because preliminary residential property values grew at a greater rate in Tax Year 2014 than commercial values, applying the new $1.126 tax rate to commercial properties would reduce total revenues from commercial real estate tax, and result in a reduction in the tax bill for most commercial properties from fiscal 14 to fiscal 15.
Although these factors will result in total revenues for fiscal 15 being less than projected, general fund revenues are still projected to increase by $17 million (2 percent) from fiscal 14 to fiscal 15.
Currently, these preliminary revenue forecasts represent a total of $15.2 million less revenue than projected for fiscal 15 and $87.5 million less revenue than projected over the entire Five-Year Plan. These lower tax revenues must be considered by the Board as they work through the fiscal 15-19 Five-Year Plan.
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