For fast-growing jurisdictions such as Loudoun County, where people and their vehicles are arriving in droves, the Virginia General Assembly's decision last year to cap the state's popular car-tax relief meant one thing: Over time, the localities would lose revenue.
In Loudoun, that loss is estimated at more than $6 million for fiscal 2007 and at least $3 million more each subsequent year. Officials are still unsure just how they will deal with that shortfall, but it is likely to come out of taxpayers' pockets one way or another.
On Tuesday, the county Board of Supervisors made a first step toward tackling the issue by proposing to bill vehicle owners on the basis of the percentage of car-tax relief offered by the state once the cap takes effect.
Not that they were happy about it.
"This battle is not over by any means. I hope this is one of our legislative priorities to get fixed," said Supervisor Lori L. Waters (R-Broad Run). "It is fundamentally wrong." She said the state was trying to make "local boards the bad guys."
Vehicle owners now pay 30 percent of the tax, and the state covers 70 percent. In March, the county will learn how much car-tax reimbursement the state will provide in future years -- and it is likely to be reduced from 70 percent. A public hearing on the board's proposed ordinance will be held Dec. 13.
Virginia's localities depend on the car tax to pay for schools, law enforcement and other services. Jurisdictions assess the value of residents' vehicles, and pricier vehicles face higher taxes.
The tax has long been despised by residents and tax-averse politicians. It appeared to meet its doom with the 1997 election of former Gov. James S. Gilmore III (R), who strode to victory on a vow to eliminate it and have the state reimburse counties and cities for lost revenue.
But the plan quickly became an expense the state could not afford. As part of a 2004 tax package meant to repair the state budget, the General Assembly voted to cap the state's annual car-tax payments at $950 million starting in 2006.
That means that in growing counties the state will mete out less money each year for each vehicle owner.
The cap's effects might not result in larger bills in localities where population and the number of vehicles are decreasing.
Loudoun expects to receive $44 million in annual state reimbursements -- down from $50 million this year -- once the tax cap is in place, said county Treasurer H. Roger Zurn Jr.
On Tuesday, some board members expressed resistance to raising vehicle owners' taxes above the 30 percent mark. If that percentage is not raised, Zurn said, the shortfall will probably be paid for by higher real estate taxes.
"If you take it from one place, you have to make it up in another," Zurn said in an interview. He said it is unlikely that the county would choose to cut its losses and operate on a smaller budget -- "not with schools growing the way they are, no."
In other business, supervisors approved an increase in commuter bus fares. Starting in early 2006, fares will increase by as much as a dollar, depending on the route. Commuters riding from Purcellville to Rosslyn and paying cash, for example, will pay $7, up from $6.
Riders going from Cascades to Lowes Island and paying cash will pay $2, up from $1.50.
The board has increased fares just once, in 2003. It estimates that the increases will bring in an additional $171,216 for the rest of this fiscal year, money that it says will help cover higher fuel costs and four new bus routes.
The board also adopted a resolution underscoring its opposition to Dominion Virginia Power Co.'s proposal to build a transmission line along the W&OD trail in western Loudoun. The State Corporation Commission will hold a public hearing on the proposal in February.
In the resolution, board members -- like several residents groups lobbying against such an overhead line in a wooded area -- expressed support for an underground power line.