Board to Discuss Tax Refund

Board to Discuss Tax Refund

Loudoun taxpayers could receive the checks within the next three weeks.

Loudoun County taxpayers may receive a $165 check per household in their mailboxes within the next month. The money comes from a tax refund, pending a decision from the Board of Supervisors at its Dec. 20 meeting.

The Finance/Government Services Committee voted 3-2 to give about $16.5 million of the $21 million budget surplus back to the taxpayers. The chairman of the committee, Supervisor Eugene Delgaudio (R-Sterling), said it is better to send the surplus back to the people than to put it toward next year's budget, which would constitute financial mismanagement, because the board does not have the authority to spend money outside the budget.

"Surplus is different from carry over," said Delgaudio. Carry overs are calculated within the budget as a projected surplus. A surplus goes above and beyond the carry over, he said.

"We should not be treating this surplus as newfound money," said Supervisor Mick Staton (R-Sugarland Run). Returning the money to the taxpayers puts more honesty in the budget process, he said.

Staton said he received approval from the board to seek the authority from the General Assembly while it was in session for Loudoun County to do tax refunds. Both of the houses in the General Assembly approved the authority unanimously.

"I DON'T BELIEVE it is a sound accounting principle," said Supervisor Bruce Tulloch (R-Potomac). Tulloch said lowering next year's tax rate returns the money to the taxpayers as well, without the mailing and administrative costs of the refund. He added Loudoun recently received a AAA rating with the bond rating agencies in New York as a result of its accounting policies to date.

Supervisor Lori Waters (R-Broad Run) said she voted for the refund because she would rather see the money returned to the taxpayers than have it spent. As far as putting the money towards other projects, Waters said those should compete with projects and initiatives presented during the budget process.

The rest of the $21 million surplus, about $4.5 million, will go toward repaying money used for projects such as the Dulles South Public Safety Center and updating the transportation plan.

Spending the surplus on projects or putting it toward next year's budget are the alternatives to the refund. Staton said there are more project proposals than there is money available for them. There will always be requests to spend the money, he said. "If I throw a $20 bill on the table, others will think of the way to spend it," said Staton. He said the checks mailed would be of equal amount, about $165, and added he would like to see the money returned to residential property owners, so the businesses and tax-exempt residential owners would not receive the refund.

"Staton is stopping the raid on the surplus," said Delgaudio. He said the tax refund would cost $150,000. However, he said, the residents of the county would have more trust in the government if it returned the money than if it spent it.

"Anybody who doesn't want the money can return it," he added.

FOR THE PAST 10 years, said Supervisor James Burton (I-Mercer), it has been the policy of the board to put surplus money into lowering the following year's tax rate.

"Using that fiscal policy has helped us get the AAA bond rating," he said.

Conducting a refund, he added, is extremely difficult to do. Burton said he proposed some of the surplus be spent to finish the construction of drain fields in a village of Willisville, a community of some 10 houses in the Mercer District, where some of the residents do not have indoor plumbing because of the problems with the drain fields. Burton said the Loudoun County Health Department declared the community a health hazard and when the majority on the committee said no to his proposal he said, "That to me is extremely cruel."

Delgaudio said the process could take as few as two to three weeks. The recommendation was slated to go before the Board of Supervisors at its Dec. 20 meeting, although Burton said the item was moved to a Jan. 3 meeting, to ensure all of the Supervisors will be present. Burton said he thinks the board will not support the committee's decision to do the refund. If approved, the county would need names, addresses and social security numbers of those receiving the refund, so it could be reported to the Internal Revenue Service.