| Rail tax district boundaries should be redrawn |
| Written by Christopher Walker | |
| Tuesday, 05 January 2010 | |
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http://www.fairfaxtimes.com/cms/story.php?id=835 The recent approval by the Fairfax County Board of Supervisors of the Dulles Rail Phase II tax district without any public discussion of alternatives for the overall rail financing structure leaves inequity issues unresolved. While the greatest inequities will result from excessive reliance on Dulles Toll Road revenues to fund a majority of rail construction costs, the present rail tax district structure, if unchanged by Fairfax County, will result in ongoing inequitable taxation for eastern Reston Phase I tax district property owners. The Board of Supervisors needs to act now to remedy this inequity. In January 2002, the Landowners Economic Alliance for the Dulles Extension of Rail was formed to "determine whether there will be a tax district to finance all or a portion of Fairfax County's share of the cost of the Metrorail extension to [Washington] Dulles [International] Airport, what the boundaries of that district should be, and what the level of tax assessment should be."In mid-2003, citing low population density and the excessive cost per rider projected based on a then-estimated $4 billion capital cost for the 23-mile rail project, the Federal Transit Administration decided against Dulles Rail funding beyond Wiehle Avenue in Reston. The Virginia Department of Rail and Public Transit elected to phased construction. Lacking assurances that rail would ever be built westward from Wiehle Avenue to Dulles Airport, the Herndon Town Council voted not to join the Dulles Rail Tax District in November 2003. In February 2004 -- without first notifying any Dulles Corridor property owners in writing -- LEADER, dominated by Tysons Corner property owners, hastily established the Phase I Dulles Rail Special Tax District to the Wiehle Avenue area. The Reston part of this tax district was included with the geographically separate Tysons Corner economic center over the objections of Reston property owners.Since July 2004, Fairfax has collected more than $120 million in Dulles Rail taxes from Phase I tax district commercial property owners at the rate of 22 cents per $100 assessed valuation. Reston Phase 1 district properties have been taxed for the last five years, even though some office buildings are located farther from the proposed Wiehle Avenue station than similar properties now included within the Phase II tax district. More than $2 billion of the projected Phase I Dulles Rail capital costs, including four stations, will be incurred in Tysons Corner where owners will be the primary beneficiaries of the rail project. Since March 2005, the Tysons Corner Task Force has worked with the Board of Supervisors and county staff to create a Tysons Corner "Vision Plan" mixed-use urban center including quadrupled property densities and the prospects for vastly increased property values there. In Reston, by contrast, steps to amend the current Comprehensive Plan were delayed repeatedly until December 2009. The newly created Reston Master Plan Task Force is dominated by the interests of major institutional property owners from the Phase II tax district and Western Alliance for Rail to Dulles.WARD secretly negotiated with Fairfax County in recent months so that Phase II property owners will be taxed at only a nickel per $100 rate initially and subsequently will be taxed at a maximum rate of 25 cents per $100 of assessed value. Properties in the Phase II district will not be subject to increases in the county "C & I District" (commercial and industrial) tax rate surcharges. By contrast, Phase I district owners are subject to a current 22 cents per $100 tax rate, a planned 29 cents per $100 tax rate and a statutory maximum of 40 cents per $100 of assessed value. To establish a unified tax district for Reston, the Reston portion of the Phase I tax district should be included in the Phase II district. A lower tax rate for the Dulles Corridor than for Tysons Corner would reflect the less intensive development planned for the Reston-Herndon area.A separate Phase I Tysons Corner tax district with a higher total tax rate than in the Dulles Corridor makes sense given the different circumstances. To remedy the current inequity, the tax money that has been paid into Fund 121 from Reston Phase I rail district owners should be rebated until the conditions for all properties in the Dulles Corridor are equalized. Not to do this is unfair and discriminatory.Before issuing any bonds secured by these tax districts or further collection of taxes from either Phase I or Phase II, the boundaries should be redrawn as outlined above. This may be done administratively since it does not require a revote of either of the tax districts. Alternately, it could be accomplished by polling the current landowners in the Reston portion of the Phase I district as to whether they wish to join Phase II. Christopher W. Walker, founder,Dulles Corridor Users Group and Phase I rail tax district property owner |
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