Prince William data center tax hike would benefit schools, Fredericksburg region

WOODBRIDGE — Prince William County leaders are aiming to hike taxes on data centers, hoping the new funds will help the county shed its bedroom community reputation and become a destination to live, work, and play.

Board of County Supervisors Chairman At-large Corey Stewart, a Republican who recently ran a failed U.S. Senate campaign against Democrat Tim Kaine, proposes raising the current tax rate on data centers from $1.25 to $2, netting an additional $9.6 million annually.

The money would be used to increase funding for schools and mental health services. It would also provide real estate tax relief for residents and businesses, reducing the county’s real estate property tax rate by $1.115, according to a press release.

Stewart compared Prince William to Loudoun County, which generates $300 million annually from their data center tax, he said.

“Putting the data center tax and funds collected into perspective, Prince William County’s data center tax rate is about 1/4th the rate in Loudoun and we collect less than $30 million annually”, states Stewart in a press release.

If approved, the data center tax would eventually double over the next five years. The proposal calls for a 75-cent increase in the data center rate from $1.25 to $2 in the first year, and then an incremental increase of 12.5 cents a year till the rate reaches $2.50

This is Stewart’s second attempt in as many years to hike the data center tax rate. Last year’s effort failed, and in February he said he wouldn’t seek to increase the data center tax rate again this year.

The Prince William Chamber of Commerce has never supported the measure.

“I am mystified at this latest move, especially in light of Stafford County’s recent decision to match Prince William’s current rate – a move specifically intended to lure data centers from Prince William who was ‘spooked’ by last year’s attempted increase,” states Prince William Chamber Board of Directors Chairman Betty Dean. “The way to generate more tax revenues from the data centers is to continue to encourage their plans for growth.  If we lose the single largest source of capital investment in the county, it will be the residential taxpayers who will end up paying for that loss with their own increased property taxes.”

Earlier this month, neighboring Stafford County adopted the same tax rate and the same depreciation schedule as Prince William County, calling it the model that the Fredericksburg region would use when trying to lure data centers there.

“I want to nominate Corey Stewart as economic development director for the Fredericksburg region,” said Stafford County Commissioner of the Revenue Scott Mayausky, who said a tax hike in Prince William would only help Stafford County and the Fredericksburg region lure new data centers.

While Prince William County has multiple data centers, Stafford County has one at Quantico Corporate Center.

Stafford leaders say they are in talks with multiple data centers that would like to open there. Economic Development Director John Holden did not provide any names of data center companies county leaders claim to be in talks with.

There are more data centers in Northern Virginia than anywhere else in the world, according to a report from the Northern Virginia Technology Council. A new fiber line that will support even more data centers now runs from Loudoun County, through Prince William and Stafford counties south to Virginia Beach.