The Alexandria City Council deliberated through the eleventh hour and unanimously passed a $566.9 million budget without enacting a bulky new tax solely on commercial properties. But officials diffused the burden by increasing the base real estate tax rate.
Alexandrias businesses claimed a victory along with groups like the Alexandria Chamber of Commerce, whose members campaigned against the commercial levy and posted anti-taxation signs in shop windows around the city.
The tax, unprecedented in Alexandria, would have charged businesses up to $12.5 cents for every $100 of their propertys value. It would have raised $110 million over the next decade for critical transportation projects.
Instead, council members raised everyones property taxes residential and commercial to 99.8 per $100, and reserved a portion of those revenues for transportation. Cash from the general fund and $35 million in borrowed funds will pay for the rest of the citys transportation needs, officials said.
The average homeowners bill will climb $107, according to officials.
Though a boon for the business community, the decision to nix the commercial levy came reluctantly for some council members.
Were not doing the add-on [tax] and I hope that doesnt hurt us politically in Richmond, said Councilman Paul Smedberg. And I hope the groups that argued against this really do step forward and work with us when we try to defend and maintain the citys transportation needs in the future.
Virginias legislature legalized the tax as a tool for municipalities across the state, but Alexandria wont take advantage.
The decision to forgo the levy shocked supporters and detractors alike, but critics agreed: the people spoke and the government listened. The choice will benefit Alexandrias reputation as a business destination, said Alexandria Chamber of Commerce President and CEO Tina Leone.
Weve just proven that this is the place to be if youre a business, Leone said. The state gave a gift in the form of this tax, and its easy just to ram it right down businesses throats. Thats what they couldve done but they didnt. They listened.
The Alexandria City Public Schools, consistently the largest chunk of the citys budget, will receive $7 million more than it did last year, and was promised $53 million over the next 10 years for more classrooms and two new elementary schools.
Council members did not approve a 1 percent increase to its workforces pension contributions, bowing to protests from public safety departments in particular.
The spending plan is about $35 million more than last the last fiscal years and becomes effective July 1.
The final vote for the budget was a perfect 7-0, but Councilwoman Alicia Hughes nearly tallied against it, citing ideological differences with her colleagues.
This is the hardest vote that I have taken on this council since the two years I have been on, Hughes said. This was tough for me because it is a departure from my ideological perspective. Its a tax increase.
Hughes was worried about tax hikes on the citys low-income residents, particularly minorities, she aid during a budget work session.
Councilman Frank Fannon, a Republican who generally opposes tax increases and was elected on a pro-business platform, said compromise was the only way to make satisfy the masses. Fannon supported the idea of pension increases for city workers, but he let it go to join his colleagues.
Consensus doesnt come without compromise, Fannon said. We all have different thoughts and different visions but the mayor did a good job this year leading us all to a consensus.
Councilwoman Del Pepper agreed.
I dont think anyone got everything they wanted on this, she said. We agreed to disagree without being disagreeable.