Hemstreet presents proposed budget for FY 2026

County Administrator Tim Hemstreet has presented a proposed budget for the Loudoun County government to the Board of Supervisors for Fiscal Year 2026, which begins July 1. The proposed budget totals $ 4.7 billion and includes a county operating budget of $1.1 billion and a Loudoun County Public Schools operating budget of $2.0 billion.

The proposed budget has been prepared at a real property tax rate of $0.805 per $100 of assessed value, which is six cents less than the current real property tax rate and one cent below the homeowner’s equalized tax rate of $0.815, which is the rate at which the average homeowner’s tax bill would remain the same as last year. Because the proposed budget is balanced with a tax rate lower than the homeowner’s equalized rate, the average homeowner tax bill would decrease slightly from $6,337 in tax year 2024 to $6,280 in tax year 2025 for existing homes.

The proposed budget includes a personal property tax rate on vehicles of $3.48—a 67-cent reduction—for tax year 2026 and a general personal property tax rate of $4.15 per $100 of assessed value for tax years 2025 and 2026.

“While this budget’s rate of growth is higher than the county’s average, it is affordable even within a budget that proposes the most significant tax rate decreases in at least the past decade, said Hemstreet. “We can accommodate this largely because of increased revenues associated with the data center industry, which now generates 38% of all general fund revenues.”

During a presentation to the Board of Supervisors on Feb. 12, Hemstreet said the proposed budget meets the Board’s guidance and includes resources for employee pay, base budget adjustments, opening of new facilities, Board priorities and department priorities, as well as a sufficient year-over-year increase to Loudoun County Public Schools.

The FY 2026 proposed budget includes:

• $22 million in base budget adjustments to continue to provide current services.
• An increase of $24.7 million in total for employee compensation to keep Loudoun competitive as an employer, which consists of a:
  • 4% merit increase for the general workforce.
  • 2.5% salary scale adjustment and a step increase for Fire and Rescue, for an average pay increase of 5.5%.
  • 5% salary scale adjustment and a step increase for Sheriff’s deputies, for an average
    pay increase of 8%.
• The addition of 240 positions in 30 departments, including a substantial number of positions associated with opening new facilities over the next two years.
• $17.3 million for affordable housing, which comes from the dedication of the equivalent of a full penny of the real property tax rate to affordable housing needs.
• $47.7 million for the Revenue Stabilization Fund, created by the Board of Supervisors in 2023 to protect the county from potential fluctuations in tax revenue from data centers.
  

The Loudoun County Public Schools’ budget request is fully funded in the proposed budget, with a year-over-year increase in the local tax funding transfer of $123.4 million.

The Loudoun County School Board is scheduled to present its FY 2026 budget to the Board of Supervisors on Monday, Feb. 24, at 6 p.m. at the LCPS Administration Building, 21000 Education Court, in Ashburn.

The development of the proposed FY 2026 budget was influenced by the economic environment,
including these significant factors: 

• Forecasted Economic Conditions: The economy is currently experiencing growth, indicated by Loudoun County’s rate of job growth that continues to outperform the state, region and nation. The county’s jobs base is expected to grow by 2% in FY 2026.
• Population Growth: While the number of residents added annually has slowed, ongoing shifts in the population’s needs continue to drive the types of resources needed to adequately serve the community.
• Real Property Portfolio: The 2025 assessment summary compiled by the Commissioner of the revenue shows that the value of taxable real property in the county increased by 20 percent during 2024, compared to a 12 percent increase in the prior year. This reflects the slowing growth in the residential market and a growing data center market. The proposed budget’s revenue outlook anticipates continued growth in the real estate market but at a slower pace in 2026. The value of commercial properties increased by an unprecedented 50%, driven mostly by data centers, which added $16 billion in value to the real property portfolio last year for a total of $41 billion. The growth in data center real property continues to reduce pressure on the residential tax base to fund the growth of services.
• Revenue Stabilization Fund: To address risk associated with data center tax revenue, the Board of Supervisors created a Revenue Stabilization Fund in 2023, with a goal of having in reserve the equivalent of 10 percent of the annual real estate and business personal property tax revenues attributable to data centers. The current funding level of the Revenue Stabilization Fund through FY 25 is $80 million. The FY 2026 proposed budget includes another $47.7 million contribution. If the Board adopts this level of funding in FY 2026, the revenue stabilization fund will be considered fully funded, with slightly more than its 10% target, which is intended to protect the county as the data center industry continues to evolve.
  

The FY 2025-2030 Amended Capital Improvement Program, which includes both county and school projects, totals approximately $3.8 billion for the six-year planning period. The category with the largest expenditure percentage is transportation projects at 40% ($1.5 billion), followed by county projects at 33% ($1.3 billion) and school projects at 27% ($1 billion).

A limited number of new projects have been added to the CIP in the categories of Pedestrian, Bridge, and Bicycle Facilities; Major Transportation Corridors; and Space Strategy and Facility Renovations.

The proposed budget is based on a real property tax rate of $0.805 per $100 of assessed value and a general personal property tax rate of $4.15 and a vehicle personal property tax of $3.48 for tax year 2026.

Under the proposed budget, the average homeowner, including all housing types in Loudoun County, would see an average real property tax bill decrease of about $57.

The Board of Supervisors will determine the final tax rates and related budget policy decisions during budget work sessions in March with final adoption of the FY 2026 budget expected at the Board’s business meeting on April 1.

There are several ways in which members of the public may participate in the budget process, including Board of Supervisors public hearings, email and voice messages. The Board will hold a public input session and two public hearings on the proposed FY 2026 budget. All three meetings will be held in the Board Room of the Loudoun County Government Center, 1 Harrison St. SE in Leesburg.

• Public Input Session, Saturday, Feb. 22, 9 a.m.
• Public Hearings: Thursday, Feb. 27, 3 p.m. & 6 p.m.

Anyone who wishes to speak at the public input session or public hearings may sign up in advance for one speaking slot, beginning Thursday, Feb. 13, by calling 703-777-0200.