Its the budget season in Alexandria, meaning its crunch time to figure out how to fund our critical transportation needs. These are not new problems. But once again, the business community is being threatened with shouldering the lions share of the bill in the form of a real estate commercial add-on tax.
This tax is not right for Alexandria.
Alexandrias neighboring jurisdictions have imposed this tax and are aggressively addressing their transportation infrastructure shortcomings as part of a regional system. There is no doubt that Alexandria must be a party to such a regional transportation system to alleviate traffic congestion, to introduce new modes of eco-friendly transit and to foster future growth to and along commercial corridors.
But unlike its neighboring jurisdictions, Alexandrias business tax base is predominantly comprised of small, locally owned and operated businesses that subsist on narrow profit margins.
More than 90 percent of the citys 9,000-plus businesses have fewer than 20 employees. To expect small business owners to bear tax burdens akin to our neighbors is unrealistic.
Commercial properties also make up a smaller portion of our tax base relative to residential properties about 45 percent. And when you remove apartments (since this tax wont apply to them), the percentage is much smaller.
Instead of killing the small businesses that make up our commercial tax base, the city needs to focus on expanding our tax base through thoughtful development and diversifying business uses so there is an adequate complement of larger businesses to pay their proportionate, larger share of taxes.
This tax is inequitable.
Theres no argument that roadway improvement projects, new public transit systems and roadway maintenance represent one of the most critical needs facing the city. We in the business community support these improvements and we are willing to pay our fair share. However, funding these needs cannot be borne solely by the business community.
This tax is not the only tool in the toolbox.
The Alexandria Chamber of Commerce recognizes the citys need to generate sufficient revenue to solve its transportation conundrum. But transportation improvements should be funded through general fund revenue or through localized tax districts that raise funds for transportation improvements in connection with new developments.
The city has established a precedent for dedicated funds, creating an open space fund fed with real estate taxes. A similar dedicated allocation of general revenue funding may be established for transportation infrastructure improvements. The city can also issue general obligation bonds to fund transportation improvement projects. As a supplement to this dedicated revenue source, look at the funding options implemented in conjunction with the North Potomac Yard Plan, in which special tax districts create an additional dedicated revenue stream.
This tax has a better chance of passing this year than in previous years. We need all businesses Chamber members or not to get involved and voice their disagreement. I encourage business owners to contact our city council members and post their opposition to the tax on the City of Alexandrias website.
The Chamber will fight with you and for you to defeat this tax yet again.