The following information explains some of the basic concepts and framework for the Town's annual budget.

Fiscal Year v. Tax Year • Annual Budget Process 
General & Enterprise Funds • Revenues & Expenditures

Fiscal Year vs. Tax Year

The Town's fiscal year runs from July 1st through June 30th of each year.  It is the 12-month period designated as the operating year for accounting and budgeting purposes.  The tax year is the same as the calendar year (January 1st through December 31st) and is based on the real estate assessments prepared by Loudoun County. Assessments are as of January 1 of the respective year.

Annual Operating Budget Process

The process of developing the annual operating budget begins in September with preliminary revenue projections for the following year to estimate funds available.  By December, each department submits a budget request to the Town Manager.  In January, once Loudoun County releases the new real estate tax assessments, Town budget staff calculate what is known as the equalized tax rate. 

The equalized tax rate is the rate that would generate the same amount of revenue as the previous year, based on the current year’s assessments. It does not include new revenue attributable to new construction and growth. When assessments go up, the equalized tax rate goes down. When assessments go down, the equalized tax rate goes up.

In February, the Town Manager presents a proposed budget, including proposed real estate and personal property tax rates,  to the Town Council. The Town Council then may hold one or more budget work sessions to discussion the budget with staff. The Town Council will hold at least one public hearing on the budget before setting the tax rate and adopting the annual budget. Per the terms of the agreement with Loudoun County who bills and collects property taxes on behalf of the Town, personal property tax rates must be adopted by the end of February and real property taxes by the end of March. The budget is adopted at the same time as the real property tax rates. The newly adopted budget takes effect on July 1st.

General & Enterprise Funds

Usually when people talk about the "Town Budget," they mean the General Fund, but the Town has two other funds set up for specific uses.

The General Fund is the Town's primary operating fund and accounts for revenues and expenditures not designated for specific uses by statute or the Town Charter. The General Fund covers all departments except for the Utilities Department.

The Capital Projects Fund accounts for the purchase and/or construction of major capital facilities, such as roads, buildings and recreational facilities, and the operating budget for the Capital Projects Management Department. It also includes the Capital Asset Replacement Program. The revenue for this fund comes from developer proffers, grants, funding from the state and federal governments, bond proceeds, and transfers from other funds (including the General Fund). 

The Utilities Fund is an "Enterprise Fund."  Enterprise funds are established to account for the operations, investing and financing activities of self-supporting activities that provide services to the public on a user-fee basis. The Utilities Fund includes an operating component and a capital component cover the six-year capital improvements program.

Revenue & Expenditures

Revenue. The Town’s revenue comes from many sources, including county/state/federal funding, real estate and other local taxes, permits, fees, fines and grants.  Major categories of revenue include:

• Real Estate Taxes.  For Tax Year 2025, an estimated 71% of real estate taxes will come from residential property and 29% from non-residential properties (including apartments, commercial and industrial, and agricultural).
• Other Local Taxes. Includes business licenses, sales and use tax, meals, hotel, bank franchise, cigarette, daily rental vehicle taxes, and utility consumption taxes. Effective Tax Year 2025, the Town no longer assesses a vehicle license fee.
• Intergovernmental Revenue.  The majority of this revenue comes from the Commonwealth of Virginia, including funding for highway maintenance and law enforcement assistance and state relief for personal property tax (motor vehicles). The remainder is from Loudoun County and the federal government.
• Program Fees, Fines, & Interest on Investments.  Includes parks & recreation user fees, interest on investments, land development application fees, parking & traffic tickets, parking garage and meter revenue, and other miscellaneous charges for Town services.
• Transfers & Donations.  Includes transfers from the Enterprise Fund, cash proffers from developers, and other contributions such as the A.V. Symington Bequest.

Expenditures. Just as a business or household must balance its budget, the Town's budgeted expenditures (including other financing uses like transfers) cannot exceed its revenue (including other financing sources such as transfers and the use of reserves).  The largest part of the Town's General Fund budget (almost two-thirds)  is dedicated to personnel expenditures – the salaries and benefits of the Town’s full-time and  part-time employees.  Functional programs within the General Fund include:

• Administering Efficient Government includes the Town Manager’s Office, the Town Council, the Clerk of the Council, and the Town Attorney's Office.
• Supporting Activities includes the Departments of Finance, Human Resources and Information Technology.
• Keeping Us Safe includes the Leesburg Police Department and the pass-through grant to the Leesburg Volunteer Fire Company.
• Providing the Necessities includes the Department of Public Works (Streets, Grounds and Building Maintenance, Traffic Management, Trash Collection & Recycling, Stormwater Management, Urban Forestry, and Inspections) as well as the Utilities Department.
• Ensuring Quality of Life includes the  Parks & Recreation Department, the Thomas Balch Library, and the Department of Community Development.
• Seizing the Future includes the Leesburg Executive Airport and the Department of Economic Development.