Loudoun Supervisor Seeks Tax Diversification Beyond Data Centers

LOUDOUN COUNTY, VA — The arrival of the coronavirus almost a year ago forced local governments across Virginia to develop robust responses to protect people from COVID-19 while also ensuring that they continued to provide regular government services to their citizens.

As part of its pandemic response efforts, Loudoun County has awarded $12 million in grants to nearly 2,000 businesses to help them survive the pandemic. In recent months, the county health department has focused on arranging sites for people to get the COVID-19 vaccine.

By working on both pandemic relief efforts and regular county business, “we’re almost running two different operations,” Loudoun County Supervisor Matt Letourneau (R-Dulles District) said Thursday at the Loudoun County Chamber of Commerce’s Board of Supervisors Breakfast, which was held virtually.

“We’re running our normal county government and then we have a whole separate COVID-19 operation that includes our vaccine site, all the things we’re doing to keep our employees and the public safe, and all of our front-line employees who are dealing with this every day,” Letourneau said. “It is really extraordinary the way that we have been able to come together and get all those things set up quickly.”

Letourneau, who serves as chairman of the Loudoun County Board’s Finance, Government Operations and Economic Development Committee, emphasized how development in the county has remained strong during the pandemic.

Over the past year, the county has seen nearly $7 billion in new commercial investment and almost 5 million square feet of new commercial real estate.

“This is really incredible,” Letourneau said about the sustained investment in the county despite the disruptions caused by the pandemic.

While unemployment in Loudoun spiked at the beginning of the pandemic, the unemployment rate now stands at 3.6 percent, which is not where it was prior to the pandemic, “but is still quite low,” he said.

Letourneau issued a word of caution about Loudoun County’s reliance on tax dollars from the huge number of data centers in the county. For fiscal year 2022, the county saw its tax revenue from the data center sector increase by almost $200 million to $586 million.

The supervisor said he believes the county should look at ways to diversify its economy in the coming years, perhaps by seeking to attract aerospace, biomedical, or other industries to the county.

“We’re incredibly appreciative of the investments our data centers are making in Loudoun County to make us the strongest market in the entire world,” Letourneau said. But having a third of the county’s revenue coming from one sector “does concern us a little bit because you don’t want to be that reliant on one particular source of revenue,” he explained.

Due to higher tax assessments, Letourneau said residential tax bills are likely to go up this year. Commercial tax bills, on the other hand, are likely to go down based on lower assessments.

In other comments at Thursday’s event, Letourneau, who serves on the board of directors of the Washington Metropolitan Area Transit Authority, said the Metro’s Silver Line phase 2, which includes two stations in Loudoun County, is 99 percent complete from a construction standpoint. There are still come quality control issues that need to be addressed, he said.

Letourneau noted that some of his colleagues on the WMATA board would prefer not to fund the opening of the second phase of the Silver Line — when it is ready to go into operation — as a cost-saving measure.

“I’m hopeful we’ll be able to overcome that,” he said, adding that he projects the Silver Line phase 2 will be ready to open this fall.