Most Alexandria businesses feel the same way about a commercial real estate tax today as they did almost two years ago: They’re opposed. City officials are making their second pass at implementing the tax, which would generate revenue exclusively for local transportation projects by forcing commercial properties to pay up to 12.5 cents more per $100 of assessed property value on their businesses.
Alexandria Chamber of Commerce President Tina Leone said the business community is impressed with the projects Alexandria would fund with the new revenue. But, she said, business owners don’t want to bear the entire burden of funding transportation improvements that, once completed, would benefit all residents of Alexandria, not just businesses.
The chamber would be less likely to oppose a tax that would charge all properties in the city. However, the City Council already instructed City Manager James Hartmann to create a fiscal 2012 budget without an increase in the residential property tax rate.
Councilman Frank Fannon said the council would continue to discuss the business tax and that he expects a serious push among council members to adopt it. If the city imposed the tax at 12.5 cents, the maximum allowed under state law, city officials estimate the tax could generate $11 million a year in new revenue, though Fannon said he opposes setting it at such a high rate.
Local governments have the option of choosing their own rate. Arlington County charges the full 12.5 cents while Fairfax County charges 11 cents.
Alexandria considered imposing the business tax two years ago at a rate between 2 cents and 4 cents, but the council voted it down.
But as the city watched its state and federal transportation funding dwindle, it faces the tough task of generating construction funds for projects like the planned transit improvements in the Potomac Yard corridor.
“If we want transportation, this is the option the state has given us to fund it,” said Fannon, who added that city could seek a compromise with local businesses to impose the tax but at a low rate.
Alexandria transportation director Rich Baier said that if the council votes in favor of the tax it would not impose it at a level as low as proposed two years ago.
Leone said the Chamber of Commerce is prepared to fight the tax at every step. Still, she is telling her organization’s members to prepare for the worst.
“If it’s going happen, this is probably the year, and we’ve got to brace ourselves for it,” Leone said. “People keep telling me, if they’re going to do it, it’ll probably be now.”
