Imagine you didn’t pay your cable or internet bill, and instead of cutting off service and possibly sending the bill to collections, the company filed a lien against your home. It may seem far-fetched, but something similar could happen to residents of Fairfax, Virginia, if the city council approves a “fee” to fund a stormwater utility.
At Tuesday night’s Fairfax City Council meeting, city staff confirmed that the city’s proposed “stormwater utility fee,” which is just another phrase for a rain tax, would be charged with residents’ real estate taxes. If you don’t pay the “stormwater utility fee,” the city could file a lien against your home. No other fee in the city works this way. That’s not how it works if you fail to pay your cable or electric utility bills. So why should Fairfax residents live in fear of a “fee” that’s actually an unnecessary and additional tax?
For background, Fairfax property owners fund our current stormwater program with 3 cents of their current real estate tax rate. That means if you have a higher assessed property than your neighbor, you pay more into our city’s stormwater management. The proposed rain tax seeks to replace the real estate tax rate model with a “fee for service” approach. This means that if this new system is adopted, you will be charged a fee based on the water runoff your property generates. Sounds fair and great, right?
Not so fast — there’s more to think about unless you can stop the rain.
First, tax-exempt does not mean “fee-exempt.” Under the city’s new fee proposal, tax-exempt groups such as churches, HOAs, veteran halls, and some other nonprofit owned properties would start paying to cover that 3 cents (or more) on the current real estate tax rate’s worth.
Tax-exempt city-owned buildings, on the other hand, would not. When I asked the city staff to disclose how much the city would owe if it had to pay the rain tax like other taxpayers, I was told it would total more than $1.4 million a year. Meanwhile, the city spent approximately $400,000 in taxpayer dollars to convince residents that paying more in taxes for rain on your roof is a good thing.
Our city’s commercial buildings, including apartment buildings, would bear a significantly larger burden of this new tax, which would be kicking businesses while they’re down. Keep in mind that while our commercial properties help keep residential property tax burdens lower, there was an overall market decrease of 5.3% for commercial properties in the city for the last quarter of 2020.
Although the new rain tax seeks to charge more to those who generate more water runoff, that also means that some of the highest assessed properties might pay less toward stormwater management than lower-assessed properties. According to sample assessments conducted by city staff, some residential neighborhoods, such as Cobbdale, Fairfax Acres, Lord Fairfax Estates, Little River Hills, and Maple Hills, will pay more in rain tax than they did on 3 cents of the real estate tax rate. No one on the council disagrees that the City of Fairfax needs more than $13 million in work on our stormwater management, but there are other ways to pay for this without soaking those residents who can least afford it.
We could issue bonds against future revenues. We could use federal funding from the COVID-19 relief legislation to pay for the project in full and still have more than $15 million available for other projects. But for now, it is this regressive rain tax that the city council will consider on Dec. 14.
Sang Yi was elected to the Fairfax, Virginia, City Council in May 2018.
