While the final vote will not occur until tomorrow, it appears Loudoun will not be required to impose a new tax on commercial and industrial properties as part of the state's new transportation funding plan.
Loudoun delegates today said that amended language is being added to the transportation bill that would require localities to raise an equivalent amount of money that would be generated by the C&I tax, but without dictating how that money is raised. For example, the proposal under consideration by the Loudoun Board of Supervisors to dedicate the revenue generated by 2 cents of the real estate tax rate to transportation would help meet that requirement.
"That will give us the local flexibility, but still do what we wanted to do," Del. Tag Greason (R-32) said.
The C&I tax was included in the transportation legislation that came out of conference earlier this week. Fairfax and Arlington counties already impose the tax, but Loudoun and Prince William do not. The bill would have required Loudoun to impose a 12.5-cent tax on all commercial and industrial properties before qualifying to receive direct transportation funding from the state.
The proposal raised the ire of supervisors, who said it would essentially tax Loudoun out of competitiveness in the commercial market. They noted the tax district recently created around the future Metro stations and the Rt. 28 Tax District as examples of what Loudoun has done to raise its own money for transportation. If the C&I tax were imposed, property owners in both districts would see a tax rate of $1.74--much higher than anything in surrounding jurisdictions, supervisors said.
Some questioned whether that requirement was intended to make Loudoun less competitive as it seeks to draw new businesses, specifically around the Metro stations.
However, Greason said the discussion in Richmond was more around fairness--and the fact that some localities had been taxing for transportation and others had not, yet each locality was wanting equal standing in the formula to receive direct funding from the state.
"You can argue whether that is correct or not, but that was more of the flavor here," he said. "I think there was more of a flavor of fairness. Everybody is asking for the same share of local funds raised by these new revenues, but not everybody has contributed to the solution equally."
Greason said Loudoun's Metro and Rt. 28 tax districts were raised as part of the discussion, and as examples of what Loudoun has tried to do locally, but said that argument did not get very far.
"Everyone was able to hold up something that showed how they have been trying to be creative over the years," he said. "So that didn’t sway the outcome."
The 100-page bill is being drafted now, and will come to the floor sometime after the session convenes at 11 a.m. tomorrow. Both Greason and Del. Joe T. May (R-33), who chairs the House of Delegates' Transportation Committee, said they would support the bill. And they both said they believe it would pass the House.
"This year for the first time almost everybody appears to be impressed by the urgency of the situation, certainly in a way we haven’t seen in the recent years," May said.
While Loudoun did not have any representatives on the conference committee, May and Del. Tom Rust (R-86) worked closely with Del. David Albo (R-42) on the bill, specifically the regional component.
"We’ve been working on this right along since the early part of the session," May said. "David and Tom were authors of [House Bill] 3202 in 2007, and we drew on that quite a bit."
May also said he believes that the General Assembly knows exactly how much money will be raised by the legislation, and that is giving legislators confidence in the bill.
"We have really a good handle on what it should raise to a pretty accurate level," he said. "Sometimes you have these wonderful ideas but then you discover wasn’t quite what you'd hoped or thought…but we have been looking at some of these ideas for several years. We’ve done some pretty good analysis of it."
Even with the need for transportation funding well established in Loudoun, May and Greason said they do not except unanimous support from the Loudoun delegation. And they said the vote will likely be close in both the House and the state Senate.
"I think it is going to be closer than we think in the House and I think it is going to be a slight margin in the Senate," Greason said. "But I think there are too many people too invested in doing this that if it falls apart I cannot even imagine what the fallout would be."