Final Transportation Deal Appears To Delete Commercial Tax Mandate - Leesburg Today Online—Daily News Coverage of Loudoun County, Leesburg, Ashburn: News

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Final Transportation Deal Appears To Delete Commercial Tax Mandate

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Posted: Thursday, February 21, 2013 4:04 pm | Updated: 4:40 pm, Thu Feb 21, 2013.

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."

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  • Bob_Smith posted at 1:06 pm on Thu, Feb 28, 2013.

    Bob_Smith Posts: 458

    'itscrankin' - turn your statements around and focus them on our surface roadway network. Do you think the non-tolled roads you drive on are "free"? Do you not understand that you pay for these roads year in and year out, whether you "use" them or not? Are you comfortable paying for bridges in Hampton Roads? - because you do. Are you comfortable for paying for roads in Round Hill, if you live in say Ashburn? - because you do.

    Please try to conceptualize all forms of transportation - the public road network, the toll-road network, and public transit - as all costing you and me and everyone one way or another. Toll roads and public transit have an additional 'user fee' per use, but the general public road system does not, because, it so vast and ubiqutous that charging a user fee to enter/exit it is systematically impossible, unlike very limited fixed routes like a toll road or a rail line.

    Perhaps you and more folks should turn the argument on its' head and start clamoring for MORE public (govt.) funding of toll roads and transit, to reduce the individual user fees, so that they are on a more equal footing with the non-user fee (and thus, highly utilized, abused, and for-granted-taken) public road network.

    You want less congestion on your drive to work ? - build more transit and incentive it by reducing or eliminating the user fee. Folks will flock to it like mad, developers will develop near it like mad, if it's more on par w/ the user-fee-less roads. And you'll have a swifter drive for it.

  • norges55 posted at 9:46 am on Thu, Feb 28, 2013.

    norges55 Posts: 1042

    Once all the sites like Belmont Excutive by the Toll Brothers and Goose Creek like many other developer sites have changed to residential instead of commerical or industrial, taxes thanks to the Bait and Switch Board of Supervisors we'll not have to be collected for C & I.
    Was it the Toll Brothers that found it was cheaper to pay the 750k fine for dumping hazardous waste into our drains then it was to pay for the correct disposal of the tainted materials? Yes!

  • itscrankin posted at 5:07 pm on Fri, Feb 22, 2013.

    itscrankin Posts: 64


    You ask a very pertinent question here. Why does Metro not charge "Fair Fares" and stop its shady business practice of hiding the true cost of commuting?

    When one considers the before-tax transportation benefit that most people working in the Greater DC area get (and take advantage of), and add the taxpayer-funded subsidy to that amount, one can clearly see how Metro riders clearly don't pay their fair share. "Fair fares" lead to "fair shares".

  • Frank Reynolds posted at 4:12 pm on Fri, Feb 22, 2013.

    Frank Reynolds Posts: 630

    As usual Northern Virginia will get screwed. Go thank our spineless coalition of "representatives" from Loudoun, Fairfax and Arlington. We'll get to pay more to get the same awful cut of the proceeds, while continuing to rely on general fund dollars for transportation. Pathetic.

  • norges55 posted at 3:56 pm on Fri, Feb 22, 2013.

    norges55 Posts: 1042

    Scary it is Mr. Operative. To expand a little bit on the registration fees. About 109 million dollars a year will be raised by this increase and will do nothing for the maintenance of our roads. All this money will go to metrobus and metrorail. Why not raise the fees to ride the bus or the metrorail. Here in Loudoun County it cost 50 cents to ride the bus unless you are taking a express then it's 2 bucks a ride. Average about a 9 dollar taxpayer funded subsidy per rider.

  • The Operative posted at 1:18 pm on Fri, Feb 22, 2013.

    The Operative Posts: 207

    It might delete the state mandated C & I tax, but it sticks it to the average tax payer. Below is a list of the proposed tax increases on the average tax payer and NOVA gets royally screwed:

    -The personal property tax will increase from 3.5% to 4.3%.
    -The tax on vending machine sales rises from 4.5% to 6% in NOVA and Hampton Roads and 5.3% elsewhere in the state.
    -Heavy equipment used for contracts on road construction, railroads, docks, etc. will be taxed at 4.3%, up from 3.5%
    -Except for the increased tax on motor vehicles, other tangible personal property will be taxed at 5%.
    -In Northern Virginia, commercial, industrial and residential land and building sales will have an additional tax of 25 cents per $100 of value. (A Conferee had previously told me the tax was 40 cents per $100)
    -In Northern Virginia there will be a 3 % hotel tax (Legislators were previously informed this amount was 2%)
    -While the bill shifts the 17.5 cent flat tax per gallon of gas to a 3.5% sales tax on the wholesale price of gasoline, it is speculative to claim that motorists will pay less for gas because the sales tax will be computed on the wholesale price of gas as of February 20, 2013.
    -Increase diseil gas tax.
    -The sales tax on purchasing vehicles (trucks and cars) increases from the current 3% to 4% on July 1, 2013, 4.1% on July 1, 2014; 4.2 % on July 1, 2015, and 4.3% on July 1, 2016. (Legislators were told it was a straight 4% tax. In reality, the tax increases each year through 2016.)