Loudoun Says No to Metro Sales Tax

Loudoun supervisors unanimously adopted a resolution opposing the idea of a regional sales tax to cover Metrorail’s funding shortfalls Thursday night.

Metropolitan Washington Council of Governments staff have offered up the option of a 1 percent regional sales tax to fill a $15.6 billion shortfall in Metro’s maintenance and repair budget over the next 10 years. The sales tax would be expected to generate $650 million annually.

A poll by The Washington Post found a slim majority of Northern Virginians favored the idea over other options, like higher fares, but it has gained very little traction with elected officials.

The Council of Governments report estimates that under a sale tax funding model, Northern Virginia alone would pick up about half the cost of Metro, with Maryland the District of Columbia splitting the rest. Loudoun would generate 10 percent of Metro tax revenue, despite having only three stops, currently under construction. The District of Columbia would contribute only 22.8 percent—less than Fairfax County at 27.6 percent.

“People that live in Neersville and Middleburg and beyond that would never be using Metro would fall under the sales tax,” said Supervisor Geary M. Higgins (R-Catoctin), who introduced the resolution opposing the sales tax. “Already we’re paying $18-plus a day to use the toll road, we’re going to be putting our gasoline taxes into this, we have high property taxes.”

Loudoun leaders have said there is little or no chance of the General Assembly signing off on a regional sales tax for Metro. Instead, the county has proposed an alternative—forming a contract among Northern Virginia jurisdictions that allows them to pool their resources and issue bonds.

Currently, Metro has to finance all its projects in cash, something very few large organizations and governments do.

“That is not the way that we operate, and if we did, we wouldn’t be building anywhere near as many schools as we do,” said Supervisor Matthew F. Letourneau (R-Dulles).

Financing larges projects on the bond market, rather than coughing up cash up front, helps localities like Loudoun stretch their infrastructure dollar further. Letourneau said pooling resources and making them bondable could cover Metro’s funding shortfalls, at least in the near term.

“What we are doing is putting an option on the table that could be a bridge to a different solution, or reduce the need for another revenue stream like those being discussed,” Letourneau said.

The resolution cites the significant taxes Loudouners already pay for transportation—including a 2.1 percent Northern Virginia gas tax, a 1-cent higher sales tax rate to fund Northern Transportation Authority projects, and high tolls along the Dulles Greenway.

The only dispute on the board was whether Loudoun indeed “has one of the highest median property tax rates in the United States,” as stated in Higgins’ original draft of the resolution, and whether that debate is germane to the question of a sales tax. That phrase was struck from the resolution 8-1 over Higgins’ strong objections.

But the vote to oppose the sales tax was unanimous. Only Supervisor Kristen C. Umstattd (D-Leesburg) showed any reservations.

“I thank Mr. Hemstreet, Mr. Letourneau, Madame Chair, for trying to come up with a creative way to bundle the cash that’s already going into Metro, and to leverage it,” Umstattd said. “But if that doesn’t get approved by the General Assembly, and if the Metro tax districts with their increased property taxes aren’t able to carry the full financial load of Metro, then if we don’t have a sales tax option, it falls back on the property tax and becomes a burden for every property owner and every person who rents property in the whole county.”

Loudoun already has overlapping special real estate tax districts around its future Metro stops and in the Metro area generally.

“The dream of Metro was sold on the basis that it was going to pay for itself, and it was going to pay for itself through the increase of property tax values, and the money that was going to come in from the tax districts, and the rest of the things that were involved in that,” said Higgins, who in his previous term voted against bringing Metro to Loudoun. “I’m not going to get into who voted for what, but we’ve had nothing but bad news since that vote on this project, so to add an additional 1 percent sales tax […] is frankly outrageous for the three miles and two stations that we have.”

rgreene@loudounnow.com
@RenssGreene

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