Fairfax Looks At Increasing Taxes to Pay For Roads
Wednesday, August 8, 2007
The Fairfax County Board of Supervisors is planning to vote next month on a proposal to raise the tax rate on retail, office and warehouse properties to pay for up to $110 million a year in transportation improvements.
If the tax increase is approved, Fairfax would become the first Northern Virginia county to take advantage of a provision in the landmark transportation agreement passed by the General Assembly in April that allows local jurisdictions to increase commercial tax rates and keep the money to spend on transportation projects.
Money from the tax increase would allow Fairfax officials to embark on road projects that have languished for years on wish lists. Projects could include the widening of Route 7 between Dranesville and Tysons Corner; work in the fast-growing Lorton area; countywide pedestrian safety improvements; interchange projects at Van Dorn Street and Telegraph Road, Gallows Road and Route 29, Stringfellow Road and Route 50, and Braddock Road near George Mason University; and consideration of a rail line to Centreville.
"If you ask almost anyone, our biggest problem is congestion and transportation," said Supervisor Sharon S. Bulova (D-Braddock). "This will provide us with money to do the things we haven't been able to do."
Other jurisdictions are contemplating increasing the commercial tax rate. Arlington County Manager Ron Carlee has asked his staff to evaluate the tax base to determine how it could work in Arlington, where many residences mix with commercial tenants in high-rise buildings.
In Fairfax County, the tax rate for residential and commercial property owners is 89 cents for each $100 of assessed value. Under the transportation legislation, county officials would be permitted to raise it as much as 25 cents, or to $1.14 for each $100, on commercial properties.
The state had previously required that governments impose a uniform tax on residential and commercial properties, which has put most of the burden on homeowners because there are more of them.
Supervisors voted Monday to advertise that Fairfax is proposing to change its commercial and industrial real estate tax rate. The board will hold a public hearing Sept. 10, after which it will consider an ordinance that would establish a new class of property and determine the areas of the county that would be affected.
Bulova said the board has not decided how much the increase should be. The rate would be set as part of the budget deliberations this spring. Fairfax County Executive Anthony H. Griffin will submit a budget proposal in February, and the board will adopt a budget in April.
The tax increase could include shopping centers, office buildings and warehouses but not apartment buildings. Gov. Timothy M. Kaine (D) had excluded apartment buildings to protect renters from the prospect of rent increases.
County officials stressed that residential taxes would not be affected, noting in a memo that homeowners have been "carrying the lion's share of real estate taxes in the last several years." The board cut the tax rate last year by 11 cents, the largest cut in modern county history.
Raising taxes in this way is likely to prove controversial in some quarters. A lawsuit filed Monday by a conservative group in Circuit Court in Richmond challenged the authority of local jurisdictions to levy such a tax, saying that power properly belongs only to the state.
"Some folks may object, but it is something the business community as a whole has supported," Bulova said of the proposal to increase the commercial tax rate.
Eric Dobson, director of government relations for the Northern Virginia chapter of the National Association of Industrial and Office Properties, said the building owners who are members of his organization have endorsed the state legislation because measures to reduce congestion are badly needed.
"We think to remain competitive we need to have an adequate transportation structure," Dobson said.