Op-Ed: Reston Transportation Tax Proposal is Grotesque County Corporate Welfare

by RestonNow.com April 18, 2016 at 2:45 pm 11 Comments

Traffic on Reston Parkway/Credit: Reston 2020This is an op-ed by Reston resident Terry Maynard. It does not reflect the opinion of Reston Now. Something on your mind? Send a letter to [email protected]

Restonians are once again faced with the prospect of the burden of an added local “tax service district  that could add hundreds of dollars to their annual property tax bill every year. The one we already have, Small Tax District 5, supports our Reston Community Center in providing cultural and educational activities for the community. The proposed new one would solely subsidize developer profits while increasing county tax revenues.

As this discussion continues, Reston Association has shared a questionnaire online with its weekly RA NewsLine (click on “Transportation Tax Survey) for residents to provide feedback on the Reston special transportation tax district idea. I urge all Restonians to vote “NO.” The following provides an explanation why.

The basis for the proposal lies in planned development in Reston’s station areas, growth that will exclusively benefit Reston’s station area landowners. Assuming that all Reston developers are as successful as Boston Properties per its 2015 annual report, their likely profit will total more than $53 billion over 40 years after building costs. That includes more than $9 billion from their future development as well as more than one billion dollars per year from their existing Reston holdings. That is an average of $1.3 billion per year!

Yet these same developers, backed by the County, want Reston homeowners to pick up as much as half of the $2.6 billion tab — about $65 million per year — for needed station area road improvement even though their total cost will be less than three percent of their profit from their Reston properties over the next 40 years.

The forecast annual road improvement cost is less than five percent of the future annual profits of the Reston station area landowners and can be easily absorbed as part of their investment in offsetting the impact of their development, but the County is proposing that residents pay some of the road costs.

One of the transportation tax options the County has proposed is that all Reston homeowners pay $.025/$100 residential property valuation to help defray the road improvement costs. Today, with the average Reston home valued at $428,000, the added cost of that Reston special tax would be $107 per year to start.  This special tax would be in addition to the average $202 Restonians already pay to operate the Reston Community Center, a County public facility committed primarily to Restonians’ use.

With 3 percent annual appreciation in the value of a family home and/or general inflation, the average added transportation tax cost would be more than $200 per year per household over the next 40 years for an average-priced home — assuming the mix of home values remains constant (and it is more likely to increase with thousands of new high-priced condos in the station areas). On a community-wide basis, that three percent annual growth in assessments would mean the average Reston homeowner would pay more than $8,800 and the total residential community tax contribution would be more than $350 million over 40 years. And that is without any shift in housing mix or tax rate increases by the Board of Supervisors.

The Board is driving the transportation tax idea because it believes that by encouraging the growth of taxable real estate values, it can solve its budget problem. Another Reston special tax district at $.025/$100 valuation Reston-wide tax rate would bring in about $4.4 million in new revenues in the first year — and grow every year thereafter — even if there is no development. Moreover, from the Board’s perspective, to the extent these taxes encourage developers to build sooner because of lower investment costs, it will create even more high-tax value high-density real estate. It’s a win-win situation from a Board perspective: More tax revenue through subsidized corporate development.

And all of that special Reston tax money would go to Reston’s station area landowners in defraying the road infrastructure costs of their for-profit development. Specifically, the taxes would be used to improve roads that go to, from, within, and through the station areas to serve developer properties that would be required for their profitable high-density development.  Yet–

  • If the developers believe they will earn an adequate return on their investment, they will build the roads needed to help make their new construction profitable anyway without a special Reston residential tax subsidy.
  • If they choose not to build for whatever reason, then Reston won’t need improved roadways (except to meet existing standards) and, therefore, we won’t need any added transportation taxes.

If the transportation tax is approved, Restonians would have no special access or other benefit to anything in the station areas despite paying a significant sum for these new or improve roads, even free parking. People from all over the county, the state, even beyond Virginia, including most of the 60,000-plus Reston station area employees who commute here daily, will use the station area roads for free while Restonians pay for them. Even those Restonians who choose not to go to the station areas (or go there rarely) such as retirees on fixed incomes and younger, less affluent Restonians will still have to pay the full transportation tax.

The ultimate irony of this road “improvement” tax proposal is that the County literally promises worse congestion as a desirable traffic “goal.”   So Restonians will be taxed to experience worse congestion, even those who only drive through the station areas, say, on Wiehle to/from the Dulles Toll Road, with no intention of visiting them.

The bottom line is that the transportation tax proposal completely detaches who pays the tax from who benefits from it. Residents pay more for less usable roadways; developers pay less and profit more. It is unfair and inequitable to Restonians by any measure.

The idea that taxing Reston homeowners, whether they live in the station areas or beyond, because they will garner some unidentified, much less quantifiable, “benefit” from the development there is a deceptive scheme and the County knows it.   The proposed County transportation tax is, in fact, nothing more than grotesque corporate welfare, the Reston property owner paying more taxes so major Reston developers can increase their profits and the County can increase its tax revenues.

The transportation tax idea should be opposed vigorously by the Reston community, the RA Board of Directors and other community leaders and organizations, the County-appointed RNAG advisory group examining Reston’s transportation options, and ultimately the Board of Supervisors itself. Do what you can now:

Terry Maynard

Reston traffic file photo

  • Why do you bother?

    I wish the survey had included a “why not?” option.

  • cosmic93

    Overall I think it’s worth voting no.
    However, I question your assertion that being elderly, retired, young, or poor, necessarily means that an individual won’t frequently visit the station areas or drive through them. That simply doesn’t make sense – if anything these are the groups more likely to use public transit, and their busses will of course pass through these areas. Those that drive will certainly need to pass through as well, so that portion of your argument doesn’t seem to pass the “kindergarten test” of at least making basic sense,

    • Terry Maynard

      I don’t think I suggested the less affluent elderly or young wouldn’t drive through the station areas, but then I may have mis-stated that somewhere in the article. Yes, we’ll all pass through the station areas one way or another.

  • Mike M

    For once, I completely agree with Terry Maynard. It is really difficult to see how someone not connected to the developers would see it any other way. There is no common sense in the local tax proposal. It begs the question why would the RA (and BOS) even go there. Note the RA and BOS elections just ended.

  • Dodge

    If by removing this special tax district and the funds collected, are we handicapping the initiative to build the traffic infrastructure we need, and leaving ourselves with the bare minimum options for decades to come? The hope that the developers will pony up voluntarily is a thin defense. The people are coming one way or another, and we need infrastructure to accommodate that. I don’t want to leave Reston with the smallest purse possible to make the changes we need. I dislike taxes as much as the next guy, but developers aren’t in the business of giving away money, and our roads are getting undriveable at peak hours already. If we want to deny this initiative, we need to have a better plan to make up the difference.

    • guest

      It’s not Reston’s purse, It’s Fairfax Counties/VA state. They should not charge Reston residents solely for something just because they cannot plan correctly. Also lets say they complete this special tax district. Then they will just continue to raise its tax and not provide ample funding for transportation in this area. because they feel we have it covered. Though I guess in the long run this may help give us an understanding costs etc. if we broke off. (if that is even possible)

    • Terry Maynard

      Dodge–There are a number of ways that developers can be made to make up any difference, including “transportation improvement districts” that only commercial developers pay (although tenants–comml & residential–pay indirectly through rents). (See http://www.fairfaxcounty.gov/planning/tysons_docs/050212tysonstaxdistrictsummary.pdf) This method has been used to have the developers pay for the construction of the Metro stations along the Silver Line. There are also a number of other ways.

      In the end, the developer would have to build a road that meets County standards, not a mule trail, even though the County often doesn’t do that on its own.

  • Bob

    It would make more sense to have a special assessment that would expire after 2-5 years. That is because development around the Silver Line increases the value of Reston property beyond what inflation would otherwise do, and the increase in property values translates into an increase in property tax revenues.

    • Chuck Morningwood

      if this were a rational world. In the end, once this tax is enacted, the BoS would create excuse after excuse to renew it. Just look at the Toll Road. The tolls were only supposed to last long enough to pay for the road, and then they would be dropped. How has that worked out for us?

    • Terry Maynard

      One of the canards of this proposal is that the tax district will disappear when the roads are built (and that won’t be until the development is done 40 years from now). It won’t. After they build the roads, the County will have to maintain them forever and this tax would be used for that purpose.

  • Rob Olcott

    Well written and articulates this misguided initiative. Restonians must come together to raise a loud voice to oppose the proposed additional tax.


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