Northern Virginia's largest business group is proposing a sales-tax increase of 1 percentage point in Fairfax County and surrounding communities that would raise nearly $1 billion over four years for roads and schools in the region -- part of a broad slate of ideas aimed at paying the costs of rapid growth.
Region -- a newborn coalition representing more than 15,000 businesses -- also advocates spending up to $60 million annually in state surpluses on local roads, bridges and schools. In addition, the group is calling for a dramatic overhaul in the state's tax structure that would return more income taxes and other revenue to Northern Virginia.
The 10-point plan, to be formally unveiled Monday, is the latest in a blizzard of transportation proposals from business and political leaders in Northern Virginia, who warn that worsening traffic is threatening the region's economic vitality. The Region plan also focuses on more funding to ease crowding in the area's overburdened public schools.
The proposals further increase the political pressure on tax-shy Gov. James S. Gilmore III (R) to find more money for road and transit projects in Northern Virginia. Area Democrats and some Republicans are agitating for $1 billion more in state transportation funding immediately, and planners estimate $11 billion will be needed over the next 20 years. Yesterday, Democrats proposed that the state repay the money it borrowed earlier this decade from its road-building program, which would provide about $300 million for transportation.
Virginia's sales tax now stands at 4.5 percent, which includes 1 percent that is kept by the locality where it is collected. The proposal by Region would add another percentage point to the levy in Alexandria and Arlington, Fairfax, Loudoun and Prince William counties.
The move would require approval from both the state legislature and local supervisors, who would then put it before voters. A referendum could be held as early as November 2000, Region leaders said.
"This is something that we think would be important to have all the jurisdictions get together and put this on a referendum," said Mike Carlin, a Washington Gas executive who serves as Region's steering committee chairman. "If you see this as part of the whole package, we would make a significant step forward and significant progress toward solving our transportation and education problems."
But the sales-tax proposal got a frosty reception yesterday from the governor's office. Gilmore, who rode to victory on his plan to slash car taxes, has vowed to oppose any tax increases to pay for road projects and will announce his own set of proposals at the end of this month.
"On fundamental principle, the governor is opposed to increasing taxes," said spokeswoman Lila Young.
The idea also received mostly chilly reviews from legislators and supervisors in Northern Virginia. Some said they flatly oppose the idea because it would require more taxes on local residents. Others said that regardless of the plan's merits, it would be difficult to get approval from the General Assembly, local governments and voters themselves.
"I think it would have a lot of questions asked in the Assembly, and then the board of supervisors would be hard pressed to support it, and then the voters would have to sign off on it," said Sen. Janet D. Howell (D-Fairfax). "That's a very, very long process."
Del. John H. "Jack" Rust Jr. (R-Fairfax), who has proposed a $3.5 billion, seven-year bond package for transportation projects statewide, joined several other lawmakers in saying that any tax increase would have to be applied throughout Virginia.
"Otherwise, you've basically Balkanized your tax system," Rust said. "I would not want to increase reliance on the sales tax."
Region is a broad coalition of chambers of commerce, developers and other business interests, including technology powerhouses such as Dulles-based America Online Inc., utilities such as Virginia Power and the Washington Board of Trade. It easily ranks as the largest business group in Northern Virginia.
The group was formed in part as a counterweight to the area's burgeoning slow-growth movement that lately has pushed proposals to broadly limit where developers can build homes or offices. Region has sought to find solutions to the region's growth dilemma without imposing any such restrictions. For instance, the coalition's 10-point plan calls for tax incentives to encourage development along transit lines and within already-developed neighborhoods, but it does not mention limits on construction in rural areas.
Mark Stavish, AOL's vice president for human resources, said Region's proposals are vital to ensure that Northern Virginia's booming economy does not reel under the weight of gridlock and other growth-related problems.
"For Fairfax, it's roads," Stavish said. "For Loudoun, it's schools. You've got to find a way to fund all that. . . . We are now the third-largest technology center in the world. We don't want to get into a situation where congestion gets so bad that people don't want to locate here."
Through the sales-tax hike, Region calculates that Northern Virginia localities could raise up to $240 million a year, or nearly a $1 billion over four years. Half of that amount would come from Fairfax County sales alone, according to county officials.
But Region avoided putting a price tag on most of its 10 proposals, arguing that such details are better left undecided at this point. One key proposal would return an undetermined portion of state income taxes to localities, which do not currently keep the taxes paid on the money earned by their residents.
Carlin said the group hopes Gilmore will seriously consider the ideas.
"This is not meant to do anything but to reach out the hand of the business community of Northern Virginia to the governor," Carlin said. "We are answering his call for innovative thinking and comprehensive solutions."