Losing the 'No Car Tax' Promise

By 2001, owners of cars valued at $20,000 or less were paying 30 percent of their tax bills. The state was reimbursing local governments the remaining 70 percent -- which was taking a big bite out of the state budget. So last year, state lawmakers voted to freeze the reimbursement at the 2004 level, or $950 million. They left it up to local legislators to decide how to distribute the money to vehicle owners.

The reimbursement freeze has cost fast-growing counties such as Loudoun and Prince William, but has had little impact on slower growing jurisdictions such as Arlington. County officials estimate that the fixed $31.3 million it receives annually from the state still covers about 68 percent of the tax. The new formula actually brings the state share back to about 70 percent, officials said.

But for many Arlington car owners who have been picking up 30 percent of the tax in recent years, the formula increases their share. For example, the owner of a vehicle valued at $10,000 will now pay 42 percent of the tax, or $210 a year, up from $132. Owners of more expensive cars will pay 50 percent of the tax.

"This was supposed to be a tax that nobody liked, and we were supposed to be getting rid of it. In Arlington, it's going the other direction," said Wayne Kubicki, a Republican who until last week was a member of the county's Fiscal Affairs Advisory Commission.

Kubicki criticized the new formula, as well as the increases, and blamed them on the board's unwillingness to cut spending, which increased by 9 percent in the new budget.

"In an $800 million budget, there had to be someplace where at least some of it could have been offset," he said.

Zimmerman countered that some of the increases were necessary, including an infusion of $8 million to keep the wages of public safety workers competitive with the rest of the region. Without that raise, he said, the county was in danger of being last in what it offered public servants. In addition, he said, cuts in federal funds for programs for low-income residents left the county in a tough spot.

"The County Board chose to mitigate instead of ignore," he said. "Look, the cost of gasoline has gone up. The cost of food has gone up. And the cost of government has gone up, too."