A proposed tax on commercial real estate in Northern Virginia, even to fund vital transportation needs, is “a nonstarter,” Gov. Tim Kaine said Monday.
The governor promised to eliminate or significantly alter the plan because he has heard heavy opposition to it from local government officials and the business community.
“Apartment building owners are very concerned about that because it would mean rent increases for many Virginians,” Kaine told reporters before addressing an economic-development conference in Arlington. “It would have a devastating effect on affordable housing.”
The controversial tax would be 25 cents per every $100 of assessed commercial property value. It is estimated to raise $208 million a year, about half of the money set aside for Northern Virginia transportation projects aspart of a bill legislators passed last month. Kaine has until Monday to sign, veto or suggest amendments to the legislation.
Any changes Kaine proposes have to be approved by the House and Senate next month to take effect. Kaine said he has prepared more than 100 amendments to the massive bill already, but most of those are correcting minor mistakes made when the legislation was hurriedly drafted last month.
Besides the commercial real estate tax, he also must decide how to address the $184 million the bill would take out of the state’s general operating fund. Kaine would rather the money be kept for services such as education and health care, but House Republicans insist some general funds go to transportation.
Should Kaine eliminate or reduce the surcharge, he is going to have to come up with money another way unless he wants to shrink revenue available for the state’s most congested area. Finding an alternate source could be difficult because many House Republicans oppose tax increases.
“If he comes up with another way to get money from the business community, I am all ears,” said Del. David Albo, R-Springfield, who developed the regional funding plan. “If the idea [is] to let the business community off the hook and stick it to the citizens, then I am not all ears.”
