Real Estate Tax To Help Pay For Roads Seen As Possibility

By Sandhya Somashekhar
Washington Post Staff Writer
Thursday, June 12, 2008

Loudoun County officials might have to impose a new commercial real estate tax to pay for road improvements and ease traffic congestion that threatens to bring down Loudoun's quality of life, Board of Supervisors Chairman Scott K. York (I) told business leaders Tuesday.

Counties were given permission to levy the tax on office and retail buildings as part of a large-scale transportation funding plan approved last year by the General Assembly. Originally, Loudoun officials had indicated that they would be reluctant to impose the tax, and the issue never came up for discussion.

But during a State of the County address hosted by the Loudoun County Chamber of Commerce, York said the supervisors should consider enacting the tax to make up for recent setbacks in the state transportation plan and to ensure that gridlock does not hurt the county's robust economy.

"We just simply cannot accept what is happening in Richmond, and we may have to go to some self-help," York said. "Unfortunately, if we don't improve our system here . . . it will grind us to a halt."

In his wide-ranging address at the Belmont Country Club, York also highlighted the board's recent efforts to reach out to Sterling area residents who have grown frustrated with deteriorating living conditions. In addition, he said, the board is considering ways to cut spending in the face of a rocky economy and rising energy costs, to help "keep this community affordable to the business community and the citizens who live here."

York's most serious concerns were reserved for the county's congested roadways. Under the state plan, county officials are allowed to impose a commercial real estate tax surcharge of up to 25 cents for each $100 of assessed value to pay for transportation improvements such as new interchanges and street-widening projects.

Originally, that plan also had empowered Northern Virginia officials to raise $300 million annually for road and transit projects through other new taxes and fees. In Loudoun, that money was expected to help pay for upgrades to routes 50 and 7, among other enhancements. But the Virginia Supreme Court rejected that funding strategy as unconstitutional this year because the fees were to be assessed by the Northern Virginia Transportation Authority, which is not an elected body.

State lawmakers are scheduled to convene in Richmond to devise an alternative plan, but there has been no accord. In brief remarks after York's speech, Del. Thomas Davis Rust (R-Fairfax), whose district includes part of eastern Loudoun, told the chamber he is skeptical that the June 23 special session will yield results.

"I wish I could tell you I'm optimistic," said Rust, who, along with Dels. David B. Albo (R-Fairfax) and Joe T. May (R-Loudoun), plans to unveil a proposal in which new fees are enacted at the state level. "At this point, I am not optimistic, but it will not be for lack of effort from the Northern Virginia delegation."

In an interview after his speech, York emphasized that he is not proposing that the new commercial real estate tax should be levied. His point, he said, is that "nothing should be off the table" as the board prepares to revise its countywide transportation plan this summer.

York said one of his concerns about the tax is that much of the county's commercial property lies in a special tax district around Route 28 that raises money to pay for upgrades to that thoroughfare. Any new tax would be added to the 20 cent surcharge already collected in that district.

However, some business groups -- including the Loudoun chamber -- have already endorsed the idea of levying the new tax for fear that the region's worsening traffic will affect the economy.

"We recognize the problem is significant, and we want to pay our fair share," said Mindy M. Williams, who heads the chamber's policy committee. "Ultimately, we would like a more comprehensive package though, so [state lawmakers] aren't relying on just us."

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