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Local Option Income Tax Dies in Virginia House Committee

Last Saturday, we growled about SB 1313, which passed the Virginia State Senate on a 27-11 vote. We cited this story by the Arlington Sun Gazette's Scott McCaffrey. According to the General Assembly's legislative information system (LIS), the bill:

"Adds the City of Portsmouth to the list of localities authorized to impose a local income tax to generate revenue to be used for transportation purposes. The bill also removes the requirement that the local income tax be approved by a referendum and repeals the five-year sunset on the local income tax."

Yesterday, a House Finance subcommittee killed the bill on a 7-3 vote, according to the LIS. Here's a portion of the Sun Gazette's story, posted by Scott McCaffrey, today:

"The House of Delegates, which seldom looks kindly on giving localities any new taxing authority, on Feb. 13 summarily rejected a state Senate proposal that would have given Northern Virginia jurisdictions easy access to implementing a local income tax.

"A subcommittee of the House Committee on Finance voted 7-3 on Feb. 13 to reject a measure, patroned by state Sen. Walter Stosch (R-Glen Allen), that would have allowed individual jurisdictions in Northern Virginia to impose income taxes of up to 1 percent on residents without first obtaining consent in a referendum.

"The concept is not completely gone from possible enactment, however, as it could be resurrected as the House and Senate wrangle over details of a major transportation-funding package.

"Localities in the area have for more than 20 years had the authority to impose the tax, but are required to hold a plebiscite first. None has chosen to do so."

The vote was largely along party lines, but as  McCaffrey pointed out, "Del. Mark Keam (D-35th) joined all Republicans on the panel to kill it."

So, kudos to the Republican members of the Finance subcommittee and to Del Mark Keam (D-Fairfax) for joining with Republican members of the committee.

Tom Jackman of the Washington Post wrote about the bill on Tuesday at their State of NoVa blog, and included the following comments of Arlington County Board chairman Walter Tejada:

"Arlington’s Tejada was not exactly enthused by the idea, but he said, ”We’re following it intently. We’re always trying to find ways to fund transportation projects, and considering we were ranked number one in gridlock, any resources would be helpful.”

"Tejada said that “too many times the state has been passing the buck to us.” After the two Northern Virginia tax attempts failed, “ever since then we’ve been trying different things, and traffic’s not going anywhere. So we’re just going to monitor this closely.”

Guess the extra 12 1/2 cents per $100 of assessed value the Board extracts from commercial property owners for the Transportation Capital Fund isn't enough. According to the FY 2013 Adopted Budget, the Board is tapping the Fund for $24 million this fiscal year.

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