New 'Authority' Approves New Taxes

New 'Authority' Approves New Taxes

After listening to 56 public witnesses over three hours, the Northern Virginia Transportation Authority voted July 12 to implement seven new local taxes to pay for long neglected transportation needs in the region.

The new taxes, spread over vehicle registration, auto maintenance and the tourist industry, will take effect Jan. 1, 2008, and are expected to raise approximately $300 million annually for transit and road projects in Northern Virginia.

The authority — made up of local elected leaders, General Assembly members and state appointees — voted overwhelmingly in favor of the tax package. Several authority members said they were not happy about raising local taxes but felt the decision was necessary.

"If not now, when? If not us, who?" said Chris Zimmerman, the authority and Arlington County Board chairman. "[The tax package] was not done in a way that we would have asked for … but the economic vitality of Northern Virginia is at risk. A yes vote is a vote for a better future."

FAIRFAX COUNTY Board of Supervisors chairman Gerald Connolly pushed for the tax package, even though he would have preferred an increase in the gas tax, a measure that was rejected by the Virginia General Assembly several times.

"Rarely in public life are we given the perfect solution to anything. … Politics is the art of the possible," he said.

Each of the localities covered by the new transportation authority will be able to keep 40 percent of the new tax revenue and apply it to road and transit needs at their discretion. Sixty percent of the funds raised will be put toward larger regional projects voted on by the authority members.

The group selected its first round of regional projects during the July 12 meeting. Members said they were restricted to picking projects in direct proportion to the amount of revenue raised by each locality.

Voting on the authority also counts proportionally. At least two-thirds of the authority members — including the nine elected locality leaders, three General Assembly members and two state appointees — must approve any decision. Then, two-thirds of the localities — or six of nine local government chairs — must approve the measure. Finally, those representing two-thirds of the Northern Virginia localities’ population must also approve the decision.

This final qualification gives Connolly de facto veto power since Fairfax County residents make up approximately 49 percent of the population encompassed in the authority’s coverage area. Prince William County is the next largest locality with 17.8 percent of the population.

CONNOLLY’S POWER has not created friction so far since the overwhelming majority of members voted in favor of the new taxes, with only two detractors. Loudoun County Board of Supervisors chairman Scott York voted for only two of the seven taxes and Del. Jeffrey Frederick (R-52) voted against all seven.

York supported the two taxes, a hotel and rental car tax, which would not necessarily affect Loudoun County residents. Earlier this month, the Loudoun County Board of Supervisors supported his decision not to endorse the tax package.

"I applaud everyone who has taken on this very difficult situation but Loudoun County will only be supportive of two of the taxes tonight," said York.

Frederick called the tax package "regressive" and said it would increase costs for middle-class residents by making necessities more expensive in Northern Virginia.

"People don’t have a choice about whether they get their car repaired or not," he said.

SEVERAL WITNESSES who showed up to testify before the board also said they found the tax package an undue burden on residents.

"My property taxes increased this year and after this slap in my face, you are going to take more money out of my pocket," said Alexandria resident Whitney Duff. "I picked to live in Virginia because it had a reputation for being a low-tax jurisdiction."

Many complained that Northern Virginia residents had already spoke on the issue of using local dollars to fund transportation projects, when a 2002 referendum that would have provided money for transportation through a half cent increase on sales tax failed. In addition to anti-tax advocates, several smart growth activists also opposed the referendum because they disagreed with the specific projects earmarked for the funding.

Some businesses also said they had concerns about the new taxes. Karen Radley, who represents Prince William County auto dealers, said the 1 percent tax on car value during purchases will cause customers purchase from dealers in neighboring jurisdictions. The 5 percent tax on auto repairs will cause big customers, like insurance companies, to do the same, she added.

OTHERS POINTED OUT that many business owners are suffering because of traffic congestion and transportation woes.

Several Realtors, who have historically been opposed to an increase in the grantors tax paid by the seller of a home, said traffic congestion was the No. 1 concern among homebuyers.

"The problem of transportation far outweighs an increase in the grantors tax," said David Howell, a local real estate agent.

Some local residents, unaffiliated with a business group, had similar sentiments.

"Who wants to live in a place where you can’t get from point A to point B in less than two hours?" said Arlington County resident Dennis Dineen.

A few residents and some legislators have questioned the authority’s ability to enact taxes. The body is the first regional taxing authority ever to exist in Virginia, where the ability to raise revenue has been limited to local and state government.