Chamber Backs Metro Tax Districts

The Loudoun County Chamber of Commerce has endorsed a proposal to create tax districts to pay for Metro’s proposed Silver Line extension to Ashburn.

As the Loudoun Board of Supervisors prepares for a June 18 meeting to continue discussing financing options if the board does agree to participate in the project, opponents have stepped up the rhetoric, distributing fliers to communities around the county.

If Loudoun participates in the project, a decision the board must make by July 4, the costs are estimated at about $270 million for the county’s share of construction, plus ongoing operation and maintenance costs. County finance staff estimates the project would cost the county between $11 million and $18 million annually in debt service payments, depending on the financing mechanism used.

Supervisors previously discussed the possibility of using a combination of a commercial and industrial tax, or C&I tax, and a rail service tax district to pay for construction, operation and maintenance of the proposed project. In addition, the possibility of winning permission from the state to establish a special tax district has been discussed.

“For many years, the Loudoun business community has said it is willing to ‘pay its fair share’ to help fund transportation investments that will improve Loudoun’s economic competitiveness and quality of life,” said Chamber President Tony Howard in a press release, adding that with the endorsement of the use of tax districts, “Loudoun’s business leaders have delivered a strong message to the Board of Supervisors that those businesses that will benefit the most from Dulles Rail are willing to bear the greatest burden to fund the County’s share of Northern Virginia’s most important transportation project.”

The commercial and industrial tax likely would apply to all business countywide; the county may consider less than a countywide application, but the revenue must equate to at least 85 percent of a countywide tax to comply with state law. Supervisors with districts farther away from proposed Metro stations have expressed concerns about a countywide tax.

A service tax district would apply to all property, including residential, within a designated distance from each rail station in Loudoun—one- and two-mile district are among the considerations. Several supervisors said they opposed taxing residential properties.

Another option that would require state authority would be to establish a special tax district, similar to the Route 28 Tax District, which could exclude residential properties.

The chamber has endorsed a countywide C&I district up to 10 cents per $100 of assessed value and a one-mile rail service district with a tax of up to 20 cents.

Howard said earlier this week that the chamber’s open to variations as well, including a tiered service district.

However, he also pointed out that the chamber would like there to be a sunset provision to reduce the taxes once construction of the project is complete, with some continued assessment to cover future maintenance and operations.

“We would like to see low rates after construction,” he said. In the chamber’s announcement it indicated a desire to see those taxes eliminated after expenses were covered for rail or if other sources of revenue surfaced.

The chamber’s letter to County Chairman Scott K. York about its position is posted below:

Chairman York,

On behalf of the Board of Directors of the Loudoun County Chamber of Commerce, I would like to share with you an important development concerning the Chamber’s efforts to ensure the planned extension of Phase 2 of the Dulles Corridor Metrorail Project to Loudoun County.

On May 23rd, Chamber’s Board of Directors adopted the following amendment to our organization’s long-standing position of support for the Dulles Rail Project:

“The Loudoun County Chamber of Commerce supports the Loudoun Board of Supervisors adopting two additional real property tax levies that would generate revenues that will be directed to fund the County’s share of the capital costs and operations and maintenance costs associated with its obligations for the construction of Phase 2 of the Dulles Corridor Metrorail Project. These levies include:

1. Creating service districts that encompass an approximate one-mile radius surrounding the four proposed Metrorail stations in or near Loudoun County and imposing up to a maximum of an additional $.20 per $100 value tax rate on all taxable property within those service districts, and;
2. Imposing a Commercial and Industrial (C&I) tax levy of up to a maximum $.10 per $100 value on commercial property throughout Loudoun County.

The Board of Directors of the Loudoun County Chamber endorses these new tax levies with the condition that the Board of Supervisors also adopt sunset provisions that would see these tax rates reduced, and eventually eliminated, when the revenues generated by these levies, along with other transportation funding sources, meets or exceeds the expenses related to the County’s capital and O&M expenses related to the Dulles Corridor Metrorail Project.”

As you know, the Loudoun County Chamber has been a long and steadfast supporter of the Dulles Corridor Metrorail Project. To make this project a reality, the Loudoun County Chamber has formed region-wide business partnerships that have made effective contributions towards securing additional state funds to reduce the projected toll increases that will be borne by the Dulles Toll Road drivers.

In addition, the Chamber’s “Rail To Loudoun” Coalition rallied the Northern Virginia business community to influence the Metropolitan Washington Airport Authority to greatly reduce the scope of the project – including altering the station design and rail yard size at Dulles Airport, effectively reducing the cost of Phase 2 by $1 billion.

This Coalition also has successfully carried the business community’s message of opposition to a mandatory Project Labor Agreement for Phase 2, which the MWAA Board has subsequently eliminated. We firmly believe that, through the efforts of Northern Virginia’s business and elected leadership, the MWAA Board will back off its current plan to provide a 10% preference to contractors that include a PLA in their construction proposals.

For many years, the Loudoun Chamber has advocated the business community’s willingness to “pay its fair share” for transportation improvements that will advance Loudoun’s economic competitiveness and quality of life. It is beyond question that these desired outcomes can be achieved by connecting Loudoun via a mass transit rail link to Dulles Airport and our Nation’s Capital. The Dulles Corridor Rail line will relieve congestion on Northern Virginia’s roads, connect workers throughout the region to companies in Loudoun County and provide a strong economic boost through Transit-Oriented Developments near the rail stations in and near Loudoun County.

For these reasons, the Chamber’s Board of Directors supports these targeted business tax levies, within reasonable parameters and for a limited time period, to generate revenues for the specific purpose of funding the construction and operation of the Dulles Corridor Rail project in Loudoun County.

As business leaders in the communities that you represent, the Chamber’s Board appreciates your serious consideration of the significant economic and quality of life benefits that this project will bring to Loudoun County’s residents and taxpayers.

On behalf of the Loudoun County Chamber of Commerce, our Board of Directors and our 1,200 members, I strongly urge your support of Loudoun County’s continued participation in Phase II.

Thank you for considering the Loudoun County Chamber’s perspective on this critical business and quality of life issue. Please contact me at (571) 209-9020 or thoward@loudounchamber.org if you should have any questions about our positioning on the Dulles Corridor Metrorail Project.

Sincerely,

Tony Howard
President & CEO