Doing right by eliminating Loudoun’s $25 vehicle license fee and doing right by Loudoun’s Towns

By Loudoun County Catoctin District Supervisor, Caleb A. Kershner

 It’s budget season in Loudoun County so you may have heard that the Loudoun County Board of Supervisors voted to remove the annoying $25 Vehicle License Fee (VLF) on motor vehicles, motorcycles and any trucks located in the County outside of a Town. Eliminating the county VLF results in approximately $7.8 million in foregone revenue to Loudoun County that will be absorbed in the FY2026 budget.  

But what about the impact on Loudoun’s Towns? Six of Loudoun’s seven towns currently implement a VLF on town vehicles. If county residents benefit from this fee elimination shouldn’t town residents also receive this relief? My answer is yes, and my colleagues agreed with me.

It turns out that the VLF is a critical revenue stream to our towns. If removed the lost revenue will have negative impacts on the General Fund budgets of Loudoun’s towns that don’t have the same options as the county in terms of revenue replacement.  Oftentimes, the only additional revenue streams for our towns are obtained by taxing town residents. 

The Coalition of Loudoun Towns wrote to the Board supporting relief from all or part of the VLF and requested that county funds be made available to each member town to offset the elimination of the VLF during any budget year that the County decides to provide VLF fee relief.  

Hamilton is looking at a loss of $14.2k, Round Hill $16k, Middleburg $17k, Lovettsville $53k, Purcellville $181k, and Leesburg $934k. Hillsboro directly collects $2k per year. Collectively, that equals a $1.2 million deficit to our Towns.

I am pleased to report that with a lot of work at the Finance Committee and a lot of discussion at the Board, I was able to work with my colleagues to secure the $1.2 million from Loudoun’s General Fund Balance to establish the Town Vehicle License Fee Revenue Replacement Grant Program for Tax Year 2025. 

This program will provide revenue relief to the towns right away should they choose to eliminate the VLF for town residents for Tax Year 2025. Towns are not mandated to accept the funding, but I am hopeful the funding will provide an incentive for the Towns to provide town residents the same relief that non-town residents will receive.

Loudoun’s seven towns are critical county partners. They are autonomous/independent governments, but they don’t exist in isolation. They are the quaint and historic locations that make Loudoun County unique, and I will be there to support our towns every step of the way.

In the end, the Board did right by Loudoun’s towns.

Supervisor Caleb A. Kershner was elected to represent the Catoctin District on the Board of Supervisors in November 2019 and reelected in 2023. Caleb grew up on a farm and now lives in Hamilton with his wife, Whitney, and their six boys. He is a partner in the law firm of Simms Showers, LLP in Leesburg and can be reached at Caleb.Kershner@loudoun.gov.