Virginianewstime.com

Michelle Attrid, the county’s chief financial officer, laid out the industry’s extraordinary growth in raw numbers during a recent presentation to the county Board of Supervisors.

The numbers come after increased and tougher scrutiny of new data center projects and accompanying council votes.

Just 10 years ago, when the industry was in its infancy, the county generated $6.2 million in data center taxes. This was the first year the county began tracking the industry’s tax total. Since then, data center tax revenue has grown 1,535% to $101.41 million in the current fiscal year, Atrid reported. Over the past decade, that income has grown by an average of 32% annually. Tax dollars collected from data centers now account for about 8% of the county’s total tax revenue.

For context, the county projects it will collect more than $800 million in total property taxes for the current fiscal year.

The revenue still pales in comparison to that of Loudoun County, which is projecting more than $500 million in data center revenue for the current fiscal year. Loudoun has more than 100 data centers, while Prince William County had 33 in operation as of October and more than a dozen are under construction.

The presentation, which is part of Ettrid’s report on the county’s overall revenue assessment, also came as supervisors considered another increase in the computer and peripherals tax, which applies to all businesses but is mostly paid for by data centers. The final decision on this issue has not been made.

In 2021, the board approved a plan to gradually increase the rate from $1.25 per $100 of assessed value to $2 by fiscal year 2025. County Executive Chris Shorter’s proposed fiscal year 2024 budget was consistent with that plan, but several executives said rates should increase more dramatically.

While the board continues to work on amendments to the budget proposal, it has set the advertised “peripheral” rate — a maximum final rate — at $2.15 for the next fiscal year. The supervisors will hold a public hearing on taxes and fees on April 11 and plan to adopt the fiscal year 2024 budget at their April 25 meeting.

According to Atrido, every 5 cents in the tax rate generates approximately $1.4 million in revenue for the county, and that number continues to grow. The county is projected to receive $40.3 million from that tax in fiscal year 2023, compared to $38.81 million from the data center property and $21 million from the furniture and equipment tax.

“Data centers are a big part of the physical business [taxes], that’s where the big dollars are,” Atrid told the board, “about 97% of the revenue comes from computers and peripherals, furniture and fixtures. … Real estate, it’s a smaller part, but as it becomes more, it grows.”

Several county executives hope the data center’s contribution to the industry will grow even further. When Shorter presented his budget proposal for fiscal year 2024, the board’s three Republicans floated the idea of ​​raising the tax rate on computers and peripherals to $2.15. According to county projections, increasing it to $2.12 would be enough to lower the property tax rate to 96.7 cents, maintaining the average amount of property taxes for homeowners.

“I think it’s time to talk about a more aggressive increase,” Brentsville Supervisor Jeanine Lawson said last month. “Things have changed dramatically, and frankly, as much as we’d like to set a timeline … constituencies change, circumstances change, the business climate changes. Everything can change.”