
Assume you didn’t pay your cable or internet bill, and instead of disconnecting service or sending the bill to collections, the company filed a lien against your home. It may seem far-fetched, but residents of Fairfax, Virginia, could face a similar fate if the city council approves a “fee” to fund a storm-water utility.
At Tuesday night’s Fairfax City Council meeting, city staff confirmed that the city’s proposed “storm-water utility fee,” which is simply another term for a rain tax, would be charged in addition to residents’ real estate taxes. If you do not pay the “storm-water utility fee,” the city may place a lien on your property. There is no other fee in the city that works in this manner. That’s not how it works if you don’t pay your cable or electric bills on time. So, why should Fairfax residents be concerned about a “fee” that is actually an unnecessary and additional tax?
For context, Fairfax property owners contribute 3 cents of their current real estate tax rate to our current storm-water program. That is, if your assessed value is higher than your neighbor’s, you will contribute more to our city’s storm-water management. The proposed rain tax would replace the current real estate tax rate model with a “fee for service” approach. This means that if this new system is implemented, you will be charged a fee based on the amount of water runoff generated by your property. Doesn’t that sound reasonable and wonderful?
Not so fast — unless you can stop the rain, there’s more to consider.
To begin, “tax-exempt” does not imply “fee-free.” Tax-exempt organizations such as churches, HOAs, veteran halls, and some other nonprofit-owned properties would begin paying to cover that 3 cents (or more) on the current real estate tax rate’s worth under the city’s new fee proposal.
City-owned tax-exempt properties, on the other hand, would not. When I asked city staff how much the city would owe if it had to pay the rain tax like the rest of the taxpayers, I was told it would be more than $1.4 million per year. Meanwhile, the city spent approximately $400,000 of taxpayer money to persuade residents that paying more taxes for rain on your roof is a good thing.
Our city’s commercial buildings, including apartment buildings, would bear a significantly greater burden of this new tax, which would be a kick in the teeth to businesses. Keep in mind that, while our commercial properties contribute to lower residential property tax burdens, the city’s commercial market decreased by 5.3 percent in the fourth quarter of 2020.
Although the new rain tax aims to charge those who generate more water runoff, it also means that some of the highest assessed properties may pay less toward storm-water management than lower-assessed properties. Some residential neighborhoods, such as Cobbdale, Fairfax Acres, Lord Fairfax Estates, Little River Hills, and Maple Hills, will pay more in rain tax than they did on 3 cents of the real estate tax rate, according to city staff sample assessments. No one on the council denies that the City of Fairfax requires more than $13 million in storm-water management work, but there are other ways to pay for it without soaking the residents who can least afford it.
We could issue bonds secured by future revenues. We could use federal funding from the COVID-19 relief legislation to pay for the project in full and still have more than $15 million available for other projects. But for now, it is this regressive rain tax that the city council will consider on Dec. 14.