A property tax paid by businesses in the Silver Line Phase 2 corridor has been helping to fund the infrastructure upgrades, even as delays have repeatedly stalled the Metrorail expansion.
The special tax has been 20 cents per $100 of assessed property value for nearly a decade and applies to commercial and industrial real estate. It can be used to pay up to $330 million of Fairfax County’s $527.3 million obligation for the project, which will extend the Silver Line from Reston to Ashburn.
As property values have dramatically increased over the last decade, the tax has brought in over $20 million annually in recent years. But an agreement with commercial and industrial property owners filed in 2009 locked in the current tax rate, according to the county.
“Per the terms of the petition for [fiscal year 2023], we can’t change the rate. So we’re going to have to keep it at 20 cents,” Fairfax County Debt Coordinator Joe LaHait said at an advisory meeting yesterday (Thursday). “And we’ve accrued quite a bit of cash — to the tune of almost about $66 million to date.”
The petition states the rate can’t exceed 20 cents per $100 of assessed property value as of the 2013 tax year and subsequent years before Metrorail service begins there.
County staff recommended keeping the rate the same for the upcoming year. The Phase 2 Dulles Rail Transportation Improvement District Advisory Board, which will meet March 29, will advise the Board of Supervisors in setting the rate.
While the tax rate can’t be changed just yet, the county is looking to reduce its debt, possibly paying off a loan in advance. The tax could be lowered in coming years before finally being phased out, possibly in the next decade or two.
Repeated delays have meant the Silver Line extension won’t open until this summer or later, but the Washington Metropolitan Area Transit Authority must give the final OK. Testing is 74% complete with trains and stations, and a rail yard is 63% complete, the county said yesterday.
Overall, office vacancy rates jumped from the end of 2020 to the end of 2021, but nonresidential real estate values have increased after a prior year decrease, County Executive Bryan Hill noted last month in a budget presentation.
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