A bill to give property tax breaks to Virginia’s power and gas companies would deprive local governments of millions of dollars in potential road funding and weaken a landmark transportation package passed last year, opponents warn.
The measure from Del. Chris Jones, R-Suffolk, would exempt facilities like pipelines and power stations from a commercial real estate tax increase being considered by Northern Virginia governments. It passed the House of Delegates this week by a wide margin and now sits in the Senate Finance Committee.
In traffic-clogged Fairfax County, sources said the bill would cut about $1 million a year from a planned 12-cent commercial property tax increase to pay for transportation projects. The exemption likely would hit Arlington County and Alexandria, which are considering raising their commercial tax rates.
Jones’ bill is among proposals that have sparked uneasiness among state and local officials by chipping away at a statewide road-and-rail funding initiative passed last session, under which the local tax increases were authorized.
The legislation would exempt vacant land owned by a “public service corporation” — which includes power and gas companies, telecommunications providers and railroads.
“If we are going to get transportation done, which is the future of the commonwealth … we have to try to hold the line,” said Del. Dave Marsden, D- Burke, who voted against the measure.
Virginia Transportation Secretary Pierce Homer said he is concerned the bill would “diminish fairly significantly transportation revenues to the region.”
Jones could not be reached for comment.
Del. Dave Albo, R-Springfield, who voted for the bill’s passage, called the concern “political rhetoric,” pointing out that local governments don’t lose money — only new revenue under tax increases.
“I think that no one every really thought that the utility companies would have to pay [for] the land where their wires are running [through],” Albo said.
