Chamber Claims Victory with Council's Decision to Scrap 'Add-On' Tax

The Alexandria City Council’s unanimous approval Monday of a budget for fiscal year 2012 came with one big surprise: The absence of a commercial property “add-on” tax to fund transportation projects throughout the city.

In February, City Manager Jim Hartmann included the add-on tax in his budget proposal. A few weeks later, council advertised the commercial add-on at 12.5 cents per $100 of valuation, the highest possible rate and one on par with similar transportation funding measures in Arlington and Fairfax Counties.

But the add-on was scrapped from the final budget. Instead, the council reserved 2.2 cents of the general tax rate—set at 99.8 cents per $100 of valuation—for transportation funding.

“We all worked on this to find a solution,” said Councilman Frank Fannon, who was an early opponent of the add-on tax. “We did it through the general fund without creating divisiveness in the city.”

The decision to scrap the add-on tax was a great relief to many in the Alexandria business community. Many felt it was unfair to levy a tax on one segment of the community when all would benefit from improved transportation infrastructure.

“They could have just reduced it and taken the easy way out,” said Mike Anderson, chairman of the board of the Alexandria Chamber of Commerce. “But they didn’t. … I’m sure they spent a lot of hours working to figure this out.”

At an April 16 hearing, the council heard testimony from almost 25 business owners and citizens who opposed the tax. On King Street and Mt. Vernon Avenue, business owners placed posters in their windows provided by the Chamber reading “Vote No Add-On Tax.”

“[The council] listened,” Chamber President Tina Leone said. “You have to be really proud of what they accomplished. We’re not Arlington or Fairfax. This proves Alexandria is the place to be for businesses.”

Following the council’s decision not to implement the tax, Leone tweeted: “VICTORY! City budget passed with NO commercial add on tax. Alexandria is now a safe haven for business!!!”

While relieved with the decision, Leone said the issue is still something to monitor. The tax could be proposed in future city budgets—Alexandria is currently searching a new city manager to replace Hartmann, whose last day is Friday—and the state house could vote to raise the ceiling for potential add-on taxes from 12.5 cents to 25 cents in 2013.

“The tax is still a threat in Northern Virginia,” Leone said. “We need to make sure this goes away.”

Leone said the Chamber has plenty of posters should the issue come up again.