Leaning Heavy on Businesses
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Leaning Heavy on Businesses

Reston’s large commercial base could play a vital role in RCA’s town proposal.

Reston Citizens Association representatives allege that Reston residents stand to gain financially if Reston — Small Tax District #5 — incorporates into a town. While the town tax would be an addition to the county tax, it could cost homeowners less than bills paid to respective homeowners associations.

"The real estate tax would be supplementary to the county tax, but so is the small district tax," said Mike Corrigan, Reston Citizens Association (RCA) president, referring to the special tax district established to pay for Reston Community Center (RCC). Corrigan outlined scenarios as to how average families in Reston would save money paying the town real estate tax of 11 cents per $100 of assessed value, instead of homeowner association fees and the small district tax. According to RCA calculations, a young family living in a $300,000 condo would save $268 under the town proposal. A young professional couple living in a $450,000 townhouse would save $211 and a retired couple living in an $800,000 house would save $50. "The point isn’t that there would be huge savings," said Corrigan. "The point is that the town wouldn’t cost more."

The real estate tax rate would also apply to commercial properties. "We would get more services for less money because of businesses," said Dick Stillson. He added that the rate would not force businesses out of Reston, as some might fear it would. "They didn’t leave Herndon," he said, adding that Herndon charges 22 cents, twice as much as the Reston proposal, for its real estate tax rate. Stillson said the town would cost the residents about $2 million, but its revenue would negate the costs. "There would also be more revenue, because we would be taxing businesses," he said.

Longtime Reston resident Dave Edwards said RCA’s town proposal is heavily dependent on the commercial contribution. He said RCA should find an incentive for businesses to support the town proposal. "You have to make it worth it for them," said Edwards. Getting the business support is absolutely essential for the town proposal, he said. "If you can do that, you’re in good shape. If not, you’re in trouble," said Edwards.

JUST HOW RELIANT the proposal is on the business contribution is unclear. Leila Gordon, Performing and Fine Arts Director at RCC, calculated that the commercial portion of the real estate tax accounts for 44 percent of the proposed town revenues. Corrigan calculated 35 percent of the revenues are derived from commercial landowners. His calculations, however, are based on fiscal year 2005 figures.

"A lot has changed since 2005," said Edwards, commenting on the real estate market trends. The residential assessments have decreased while commercial assessments in the area have increased. Gordon said more than that has changed. "The tax district is considerably smaller now," she said, referring to neighborhoods that decided to leave the tax district because they did not feel a part of Reston. Corrigan said the tax district is "somewhat" smaller.

Gordon took exception to another issue she felt was not addressed in RCA’s town proposal. She felt the pensions of people working at RCC, who are county employees, are not accounted for. "You’re not treating it," she said. According to Gordon, when RCA analyzed the RCC budget for its proposal it was able to see the RCC employee contribution towards the pension, but not the county’s match, which is not budgeted. "I should stop calling it a match, it is substantially more than the employee contribution," she said. While the pension is the "biggest" item not addressed in the town proposal, she said other benefits such as child care and health options for county employees are also not taken into consideration.

Reston resident Richard Chew said RCA needed to take those factors into its financial considerations. "Not just employees and accrued pensions, but also comparable county benefits," he said, should be added to the town expenses.

ONE OF THE REASONS RCA feels Reston should incorporate is to give the community a voice at the table when important regional discussions arise. Corrigan said that because of its town status, Herndon was able to break into two a commercial tax district established to help fund the metro extension to Dulles. He said that because the planners refused to extend Phase 1 of the rail extension to Herndon, instead of Wiehle Avenue in Reston, the Town of Herndon backed its businesses in a bid to not contribute to metro funding until the extension reached Herndon. "Herndon broke it up into two tax districts," said Corrigan.

Edwards disagreed. "The federal government mandated that it ends at Wiehle," said Edwards, who serves as chair of the Reston Association Transportation Advisory Committee. Gordon also chimed in, saying that no pressure could dissuade the federal government from its original plan for the rail extension. As an example, she cited the tunnel issue in Tysons Corner where a considerable advocacy effort for an underground route through the business center failed.

Another reason for incorporation is that as a town Reston could apply for federal grants. One of the positions proposed in the town staff is a public safety coordinator. Marion Stillson, vice president of RCA, said that person would work with local public safety personnel, as well as evacuation and terrorism issues. Corrigan said that distinction could help earn funds from the Department of Homeland Security. The RCA had a chance to present its financial findings on Saturday morning, July 14, in the second of its three town proposal workshops. About 10 people attended the workshop. The last of the three workshops is scheduled on Saturday, July 28, and will discuss the proposed town charter.