Top elected officials in Northern Virginia agreed to ask Gov. Ralph Northam to use more state money or raise local taxes to pay for that state’s Metro bill, instead of using so much funding earmarked mostly for road projects.
The leaders of Fairfax, Arlington and Loudoun counties and the city of Alexandria are pressing Northam (D) to restore some or all of the $102 million a year that Northern Virginia would lose under Metro legislation passed this month by the General Assembly.
The officials, all Democrats, welcomed the plan to provide Metro with $154 million a year in new, permanent funding if Maryland contributes $167 million and the District gives $178 million. Maryland pledged Thursday to cover its share. D.C. Mayor Muriel E. Bowser (D) and other top city leaders have pledged to provide their share, paid for partly by increases in the sales tax, commercial property levy and the tax on ride-hailing services such as Uber and Lyft.
But the Virginia officials are dismayed at the bill’s higher-than-expected cost in giving Metro money that goes to widen roads, improve intersections and support transit projects in their severely congested suburbs.
The Northern Virginia Transportation Authority (NVTA), the agency primarily responsible for prioritizing, planning and funding such projects, would lose more than a quarter of its annual revenue in money that the bill redirects to Metro.
“It can do damage to the authority,” said Loudoun Board of Supervisors Chair Phyllis J. Randall (At-Large). “There should have been a substantially larger number [of dollars] from the state.”
Randall chaired a transportation authority committee meeting Thursday in which the jurisdictions agreed to join forces to write Northam a letter, expected to be sent by Monday. Other participants included Fairfax Board of Supervisors Chair Sharon Bulova, Arlington Board Chair Katie Cristol and Alexandria Mayor Allison Silberberg.
Northam has said he will propose amending the legislation to address Northern Virginia’s concerns. The NVTA group proposed three ways the governor could help, in descending order of preference:
First, they recommend increasing the state’s contribution from $30 million a year to cover some or all of the $102 million that Northern Virginia is losing.
Second, restore $75 million of the funds by raising taxes on real estate transactions and hotel stays in Northern Virginia. Those tax increases were included in the Senate’s original version of the bill but were killed by House Republican negotiators in a conference committee at the end of the legislative session.
Third, restore $45 million by raising only the tax on real estate transactions, also known as the grantor’s tax.
Of those possibilities, the third appears to have the best chance of gaining traction. That is partly because it requires the governor to find the least amount of money, and partly because Northern Virginia is most interested in securing the money that way.
The region had expected to lose the other revenue in the Metro deal, but not the money from the grantor’s tax.
“We want our grantor’s tax back,” Bulova said. “We’ve become resigned” to losing the hotel tax, she said.
Legislators outside Northern Virginia would resist having the state pick up more of the cost. The original Metro bill was changed once to increase the state’s contribution from zero to $30 million a year.
“It’s unlikely that we’re going to get more than the $30 million,” Sen. Richard H. Black (R-Loudoun) said at the meeting.
Black also warned that the GOP-controlled House would continue to oppose a tax increase. But after big Democratic gains in the November legislative elections, Northam would have to persuade only as few as two Republican House members to vote in favor of the amended bill.
Since the tax increase would affect only Northern Virginia — and has the support of the Republican leadership in the Senate — some Democrats predicted privately that Northam could make that change stick.
Supporters of the tax increases note that they would fall disproportionately on people from outside Northern Virginia, or people who are leaving the area. Many people paying the hotel tax are tourists or other visitors from out of town. The grantor’s tax is paid by people selling property, many of whom are moving away.
“Those taxes have much less impact on residents,” Randall said.