Alexandria is considering taxing commercial real estate to generate $11 million a year in new revenue that would be spent on transportation projects.
Owners of nonresidential commercial property would have to pay as much as 12.5 cents more for each $100 in assessed property value.
For a $2 million property, that would mean paying an extra $2,500 a year on top of what owners already pay.
City officials will hold three public meetings over the next three months to discuss the tax and transportation projects. The first meeting will be held at City Hall on Thursday at 7:30 p.m.
The transportation tax was one of several new fee and tax options granted by the Virginia General Assembly in 2007 to help cash-strapped jurisdictions in Northern Virginia and Hampton Roads find new funding sources for transportation projects.
Arlington and Fairfax counties both moved quickly to adopt the transportation tax. Arlington County charges 12.5 cents, the maximum allowed under the law. Fairfax County charges 11 cents.
Alexandria would collect an additional $11 million annually if it adopted the 12.5-cent rate increase.
All revenue collected with the tax option must go toward transportation.
In a recent presentation to the Alexandria City Council, city officials highlighted 15 transportation projects as high priorities, including a new Metro station entrance at Eisenhower Avenue and the eventual transition from buses to streetcars on the proposed Crystal City-Potomac Yard transit corridor.
Alexandria’s City Council originally declined to adopt the tax, despite a recommendation to do so in 2008 by an ad hoc committee researching the tax. The committee had suggested the council implement an initial tax rate from 2 to 4 cents with an option to adjust the rate each year as needed.
If the council adopts the new tax this time around, it would likely do so at a higher rate to generate enough money to cover the cost of the city’s transportation projects, said Rich Baier, director of Alexandria’s department of transportation and environmental services.
Local businesses have been impressed by the city’s transportation project goals, but are still mulling their position on the tax, said Tina Leone, president of the Alexandria Chamber of Commerce.
The tax came under fire recently in Fairfax County, where a local property owner filed suit claiming the tax was unconstitutional. The Virginia Supreme Court disagreed, and upheld the tax option in a Nov. 4 ruling.
