What can we learn from Loudoun’s financial trouble?
Loudoun County, once the fastest growing county in the nation, is now $1 billion in debt—a direct consequence of growing too fast, too much, too scattered.
In the coming fiscal year alone, Loudoun will need to pay $175.5 million in debt services. That comes to $583 for every man, woman and child—or $2,332 for a family of four! The costs of the county’s debt account for 24.2 cents on the tax rate—and Loudoun residents pay the highest property taxes in the South, according to Forbes Magazine. On average, Loudoun households pay $4,844 in property taxes, compared to the national average of $1,180. And Loudoun’s debt keeps growing. Its debt obligation is projected to peak in 2015 at $240 million.
How did Loudoun get into this drastic situation? And what can we learn from its experience?
The county’s fiscal distress results from poor planning and rapid growth. In the last decade, Loudoun’s population shot up by 77%. Now, the county is looking at needs for eight new schools to be built in the next six years. Throughout the boom, sprawling patterns of development prevailed, meaning that residents need to drive almost everywhere they go, often long distances. Now, Loudoun’s transportation network is badly strained, with few funds available to improve it. And there’s more development lined up. Nearly 40,000 residential units have been approved but not built yet—and applications keep coming in, like the 1,400 home Kincora proposal currently before the Board of Supervisors.
At this point in the economic cycle, there is a real danger that many local governments, eager for economic development, will recruit and approve growth in any form. But if we learn from Loudoun’s example, it is clear that rapid development without sound planning is a path to fiscal disaster.
PEC is hard at work throughout our region encouraging thoughtful planning that will keep our communities great places to live. Moving forward in Loudoun, we are advocating for development focused around the D.C. Metro stations that are coming in the next decade. We’re pressing for cost-effective transportation solutions that meet the needs of existing communities rather than encouraging further sprawl. We’re highlighting opportunities to attract leading edge green energy businesses. And we’re strengthening Loudoun’s tax positive farming economy—with 1,427 farms and wineries currently doing business.