Loudoun County School Board adopts $123M budget amid rising local tax funding demands

The Loudoun County Board of Supervisors convened on February 12, 2025, to discuss key financial matters, including the recently adopted operating budget for Loudoun County Public Schools (LCPS) and the broader implications for the county's fiscal health.

The meeting began with an overview of the LCPS operating budget, which was adopted by the school board on February 4. The school board's request for funding aligns with a 60% local tax funding increase, amounting to a transfer of $123.4 million, which is fully supported in the county's budget proposal. The school board is scheduled to present its adopted budget to the Board of Supervisors on February 24.

County officials highlighted that the growth rate of the budget has exceeded that of traditional local government organizations. While Loudoun County has experienced significant growth over the past three decades, this trend is expected to plateau in the coming years. As growth stabilizes, the Board will need to develop strategies to manage budget growth in a sustainable manner, recognizing that reduced growth will lead to decreased revenue.

The proposed budget for FY 26 reflects an 11% increase in local tax funding, surpassing the 9% average growth rate of the past decade. This increase is attributed to several factors, including heightened base budget and debt service needs, particularly in retiree healthcare and land acquisitions. Despite the higher growth rate, officials noted that the budget remains manageable, especially given the anticipated tax rate decreases.

A significant concern raised during the meeting was the disparity in funding from the Commonwealth of Virginia. Loudoun County contributes substantially to state revenues, yet only 30 to 35 cents of every dollar is reinvested back into the county. This has led to the county supplementing state funding to meet local service requirements, particularly in education and public safety. For instance, the county currently funds 71% of the LCPS operating budget, well above the state-mandated 55%.

The meeting also addressed the underfunding of the Loudoun County health department, which receives only 15% of the true costs for public health services, the lowest per capita funding in the state. Additionally, the county is taking on responsibilities for a new stabilization center for behavioral health crises, a service traditionally funded by the state.

In terms of infrastructure, the Board has allocated $1.2 billion of the $3.8 billion Capital Improvement Plan (CIP) for road construction and safety improvements, a responsibility typically managed by the Commonwealth. The meeting concluded with a discussion on the impact of property tax revaluation, indicating that the average homeowner would see a decrease in their tax bill for the upcoming year.

Overall, the Board of Supervisors emphasized the need for strategic planning in light of changing growth patterns and the ongoing challenges posed by state funding disparities. The next steps will involve further discussions on budget priorities and the upcoming presentation from the school board.