Prince William surplus, data-center taxes and new reserves shape 2025 budget outlook

Prince William County’s finance team reported a $68.7 million audited general revenue surplus for fiscal 2024 and told the Board of County Supervisors the county’s revenue mix is changing rapidly because of revenue tied to data centers and associated computer equipment and peripheral (C&P) valuations.

The disclosure came during an economic and revenue briefing led by Tim LeClaire of the county finance department. He told the board national indicators were “neutral” — job growth and inflation moving in opposite directions — but that local revenue was holding up. LeClaire said data-center-related tax streams (real property and C&P taxes, plus personal property on equipment and some business license filings) were large contributors to recent revenue growth.

County staff summarized how the $68.7 million surplus will be used. After required increases to the unassigned fund balance and a 2 percent revenue stabilization reserve, the county executive recommended programmatic uses including $5.6 million to seed a newly created data center revenue stabilization reserve and $5 million for an affordable housing trust for FY25–26. The county will also transfer the budgeted share to Prince William County Schools under the existing revenue-sharing agreement; staff said the school transfer and required fund actions together account for most of the surplus.

“At the end of the year we had a stronger result than expected,” said Michelle, the county’s budget office presenter, noting stronger-than-forecast food-and-beverage receipts and investment income. She said staff was tightening forecasting models for newly introduced revenue sources like the county’s food-and-beverage tax and for volatile areas such as personal property tied to vehicles.

The board spent considerable time on policy options that could change the county’s longer-term revenue profile. Staff outlined these options: - A business-license-fee (BPOL-like) registration fee to identify local businesses and raise modest administrative revenue (roughly $300,000–$500,000 at $30–$50 per business) and to improve compliance and outreach; implementation would be calendar-year 2026 at the earliest. - An exemption threshold on BPOL-style taxes (e.g., exempting the first $500,000 of receipts) — preliminary staff estimates put the cost near $4.2 million annually. - A cut to the meals tax (example: reduce from 4 percent to 2 percent) would reduce county revenue by about $9.3 million in a full year, with a larger combined impact including the schools. - Adoption of a commercial-and-industrial (C&I) tax (sometimes called a C&I or CNI tax) earmarked for mobility projects — staff estimated roughly $27.5 million in new annual revenue if a tax at the top allowable rate were adopted, with data centers accounting for a material share of that revenue.

Board members repeatedly pressed staff on two other revenue areas: personal property (vehicle) valuation and the county’s recent decision to levy computer equipment and peripheral tax at a higher rate (raised to $3.70 per $100 of assessed value) as part of the FY25 budget. Staff said computer and peripheral receipts contributed tens of millions to FY24 revenue and that the county adopted a 10 percent data-center revenue stabilization reserve as a prudent step given revenue concentration.

Several supervisors voiced concern about the county’s exposure to swings in a single industry and the fairness of utilities and tax practices that may push infrastructure costs onto other customers. That line of questioning prompted board direction later in the meeting to consider legislative outreach on state policy that affects how electric distribution costs serving data centers are assigned.

LeClaire and budget staff said they will bring more detailed revenue estimates and proposals for FY26 in the coming weeks and recommended the board weigh program choices against the county’s reserve and debt metrics.

Why it matters: Data-centers and C&P taxes are now a major revenue factor for Prince William County. The board’s decisions about reserves, targeted taxes such as a C&I tax, and whether to change business-license rules will determine how the county balances near-term capacity to invest in infrastructure with long-term budget stability.

Sources: Presentation and revenue tables by Tim LeClaire and county budget staff during the Jan. 2025 board meeting. No outside estimates were used.