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Will the burden on residents be lightened?

June 27, 2008 12:15 am

ON JULY 1, 2008, the Stafford County Board of Supervisors will hold a public hearing on a Business, Professional, and Occupational License tax. Of Virginia's 95 counties, 44 of them and all 39 Virginia towns and cities already have BPOL, so the opponent's argument that it kills business just doesn't hold water.

Both the city of Fredericksburg and Spotsylvania County have a BPOL. What do Fredericksburg and Spotsylvania know that Stafford doesn't? They know that national retail businesses expect to pay local taxes to support the infrastructure in localities. It is part of the cost of doing business, and it is only fair to expect the business community to share in the costs borne by local taxpayers for maintaining a very expensive infrastructure. After all, the business community makes millions of dollars selling to our residents.

The business community says that they will just raise prices to cover the costs. But wait: If you buy the same hamburger from the same fast-food chain restaurant in Fredericksburg, Spotsylvania, and Stafford, you pay the same amount. If you buy the same power drill from a chain hardware store in the three localities, you pay the same amount. The difference is that in Fredericksburg and Spotsylvania the local governments capture part of that revenue that would otherwise go back to the home offices in other states. Why isn't Stafford doing this instead of always going after the homeowner every time the costs of government rise?

Another thing the opponents neglect to tell you is that BPOL will reap millions of dollars for Stafford County from people who do not live there but use its facilities. Whenever Stafford's residents travel, they use the existing infrastructure of the localities they pass through and visit. Likewise, people who come to Stafford use its infrastructure. All across this country, local governments find ways to capture various revenues from workers living outside their jurisdictions, as well as from travelers and visitors. Stafford residents pay when they travel. Shouldn't they expect visitors to contribute their fair share when they come here? It is good business sense on the part of the county and its residents to invest some money to bring in much more.

Even if Stafford uses the Spotsylvania model, which is the one being proposed, it will conservatively generate between $2.7 million and $3.4 million every year. These are net numbers, after all expenses. This is collecting half of what Virginia state law allows, while still having an exemption of taxes on the first $200,000 that any business makes. This exemption takes much of the wind out of the sails of the argument that this tax will hurt small businesses.

SOMEONE ELSE PAYS TAXES

Opponents of a BPOL like to show a long list of taxes that commercial interests already pay, but, if you look closely at the list, you will find that in the vast majority of cases, those taxes are paid by someone else. They collect the money from customers and pass it on to the localities. Does a toll collector on the interstate get to deduct the money he collects all day from his personal tax obligations? No, but we are not surprised that commercial interests try to use this argument. What surprises us is that they can do it with a straight face. To them, your money is their money and should count against their tax bill. How does the average taxpayer get this kind of deal? He can't.

Since 2002, residential real-estate taxes have risen more than 50 percent in Stafford County, while during this same period, true business contributions have remained essentially flat. In fact, in 2006, commercial real-estate taxes actually went down. There is obviously something wrong with this picture, so a number of supervisors who represent the people's interests are trying to change it. It's called fairness.

In addition, the BPOL will allow the commissioner of revenue to track businesses through license registration, as well as increase compliance. It is just common sense that Stafford should be doing this.

It should come as no surprise that many local governments are facing serious challenges as they are forced to deal with reduced tax revenues because of the slowdown in the economy and sharply rising fuel costs, which make almost everything localities buy more expensive. Every dollar we can collect from commercial interests is one dollar we do not have to add in property taxes. All along, homeowners have had to carry the majority of the tax burden.

In the end, government is expensive and will likely get much more expensive. The BPOL is a revenue stream from commercial interests that the state allows, but previous Stafford County administrations have denied this relief to its residential property owners. It is time to stand up and change this. Don't be fooled by all of the smoke and mirrors generated by the opponents of BPOL. They just want to keep more of their money in their pockets by reaching deeper into yours. There is a new majority on the Stafford Board of Supervisors, and hopefully those days are over.

George Schwartz is chairman of the Stafford County Board of Supervisors, and Archer Di Peppe is vice chairman of the Stafford County Planning Commission.