Loudoun supervisors are scrambling this evening to get word to Loudoun's delegation that the transportation funding compromise that came out of the House of Delegates would have "dire" consequences for the county.
The bill would raise around $350 million for Northern Virginia, 70 percent of which would go to the region as a whole to be dispersed. The other 30 percent would be given directly to localities. However, there is a catch.
A provision in the bill would require localities to implement a countywide commercial and industrial tax—part of the 2007 transportation bill that came out of the General Assembly—to get any of that 30 percent.
That requirement would tax Loudoun out of competitiveness in the commercial market, supervisors said. Neither Loudoun nor Prince William has enacted a commercial and industrial tax.
The House is scheduled to vote on the bill tomorrow.
Supervisors debated the possibility of a C&I tax, as it is known, during its decision on Phase II of the Metro project. But since that tax can only be applied countywide—leaving businesses far away from the Metro line paying for the project—the board opted to create tax districts around the station. By doing that, along with the Rt. 28 Tax District, Loudoun is raising its own revenue for transportation projects, supervisors said, only in different ways.
If the C&I tax is applied on top of those two districts it would leave Loudoun with a tax rate much higher than surrounding jurisdictions.
"If you're in the two special tax district, that would be $1.74. Compare that to Arlington at $1.09," Chairman Scott K. York (R-At Large) said. "We need to strongly get this word out that this is absolutely ridiculous."
And get the word out they did.
As they broke before their public input at 6 p.m. today, supervisors immediately started divvying up the county's delegation in Richmond and calling each member to urge them to oppose that provision. The board also voted to take a formal position opposing the requirement and sent staff members to contact its lobbyists.
Supervisor Matt Letourneau (R-Dulles) said he spoke with one member of the delegation before today's 4 p.m. meeting, who raised concerns that the rest of Loudoun's delegation was prepared to support the transportation bill as written. That caused other supervisors to bristle. Supervisor Ralph Buona (R-Ashburn) read from an email from Fairfax Del. David Albo explaining that the C&I requirement was designed to avoid "unfairness" of one jurisdiction having a significantly lower tax rate than another.
"This is holding a gun to our heads and holding us hostage," Buona said, adding, "We fought long and hard to not do a countywide C&I. This is a countywide C&I mandated to us from Richmond because we have done a good job of paying for things in another manner."
As supervisors began to file back into the board room word was that language was being drafted to exclude Loudoun because of the other taxing measures it had already undertaken. But winning support for that change is far from certain, and the consequences in the eyes of supervisors was real.
"A C&I tax would significantly hurt our ability to grow our commercial tax base," Letourneau said. "To have it on top of Rt. 28, on top of Metro, would put our commercial enterprises at a real disadvantage."