taxes

Webb Praises Tax Cut Compromise at Chamber Event

By ARLnow.com

Speaking to the Arlington Chamber of Commerce this afternoon, Sen. Jim Webb (D-Va.) expressed strong support for the tax cut deal between President Obama and congressional Republicans, calling the compromise “an act of leadership.”

The keynote speaker at the Chamber’s 86th Annual Meeting, Webb said he’s encouraged by the president’s willingness to break with the Democratic base.

“What the president has done here is something I’ve been waiting for him to do for a long time, and that is to get out of the base of the party and move into where we need to be as Americans to solve the problems that we have,” Webb said. “There are things in here for everybody not to like, but that’s just what happens when you get into this business.”

Obama’s tax proposal calls for a two-year extension of the Bush tax cuts for all income brackets, a 13-month extension of long-term unemployment benefits, tax breaks for business investments, a weakening of the estate tax, and a 2 percent payroll tax production. Since the compromise was announced, the president has had to fight off criticism from members of his own party, who say the deal is costly and a boon for the rich.

“It’s not a totally popular position inside our caucus at the moment, but I think we really do need to get this done for the good of the country,” Webb said. “It’s not a Republican issue, it’s not a Democratic issue, it’s an issue of how we get our economy going.”

Webb said lower taxes and continued unemployment benefits have the potential to greatly benefit the economy. In explaining why, he adopted the economic rationale cited by many Republicans.

“What all this has the potential of doing, in my view, is to stimulate our economy in a way that the TARP did not, and these other programs did not, because it’s going to put money directly in the hands of people who will spend it,” he said. “Study after study has shown that when you put money into unemployment benefits, it’s one of the fastest ways to recirculate money in your economy, because people aren’t going to hang on to it, they’re going to go out and spend it.”

Webb said simply allowing the Bush tax cuts to expire in January would be a mistake.

“People who don’t like this, I’m not sure they’re going to like what happens if they don’t pass it,” he said.

(more…)

Morning Notes

By ARLnow.com

Quarterdeck May Remain Open, After All — TBD is reporting that the owner of Quarterdeck has reopened lease negotiations with the property’s landlord. Last week it was revealed that owner Lou Gatti was telling Radnor / Fort Myer Heights residents that the restaurant would be closing after 31 years in business.

Plastic Bag Tax May Have to Wait — The county board’s desire to impose a 5-cent tax on plastic grocery store bags — similar to the tax currently in place in the District — may have to wait until another year. At Wednesday’s work session between the board and Arlington’s state legislative delegation, bag tax proponent Del. Adam Ebbin said getting Virginia lawmakers to grant Arlington the authority to impose such a tax would likely be “a multi-year effort.” More from the Sun Gazette.

Long-Time Parks Employee Dies — Long-time Parks and Recreation Department supervisor Alan W. Brady has died. Brady, who ran a landscaping business in Arlington after retiring from the department, will be remembered at a memorial service in Ranson, W.V. on Monday. He was 58. More from the Martinsburg Journal.

Flickr pool photo by Patryce

County Seeks Renewal of Hotel Tax Surcharge

By ARLnow.com

(Updated at 10:30 a.m.) Arlington, the top visitor destination in the state of Virginia, spends just under $1 million on tourism promotion each year. But if the county’s state legislative delegation can’t convince fellow lawmakers to renew the law that allows Arlington to collect those funds as a tax surcharge, the relatively meager tourism budget could drop to zero.

Arlington funds its Convention and Visitors Service through a 0.25 percent surcharge on the standard 5 percent hotel tax. Each year, the county collects $21 million in hotel taxes, or about $5,000 per room, the highest rate in Virginia. Suffice to say that given the hoards of tourists who stay at hotels in Arlington as a cheaper alternative to the District, the surcharge isn’t much of a hindrance.

But the extra quarter of a percentage point, despite having the support of the Arlington Chamber of Commerce and the local hotel industry, may be a tough sell in Richmond.

In an anti-tax, Tea Party kind of a year, Arlington’s Democratic lawmakers say that even passing something as simple as a re-authorization for Arlington’s hotel tax surcharge could be difficult.

“It’s going to be extremely challenging to get this bill through this year,” said Del. Bob Brink. “It has the dreaded T-word in it.”

Brink seemed to tacitly acknowledge that the county’s strained relationship with Richmond — caused in part by the county’s HOT lanes lawsuit, the Secure Communities opt-out fiasco and other slights — has also contributed to the degree of difficulty in gaining legislative cooperation.

“We’re in a very challenging environment, both fiscally and otherwise,” Brink said.

At one point board member Chris Zimmerman parted from the board’s stated position and questioned whether it was worth the legislators’ effort for a mere million dollars.

“Should this be one of the things we expend political capital on?” he asked.

In so many words, ‘yes’ seemed to be the response.

“It is going to be a challenge, but I think we can do it,” Brink said.

The current tax authorization expires on Jan. 1, 2012. Arlington will ask that it be extended for another three years. The approval requires a 2/3 vote in each chamber of the state legislature.

Lyon Park Community House Renovations May Get Tax Boost

By ARLnow.com

Plans to renovate the historic Lyon Park Community House, at least 15 years in the making, are coming close to fruition.

With architectural plans in place, neighborhood leaders are making a big fundraising push. They’re hoping that the upcoming tax season provides a bounty of tax-deductible stock donations and large corporate gifts.

As of October, the Lyon Park Citizens Association was about $430,000 away from their total fundraising goal of $550,000. In addition to large donations, the group is raising money by holding events like a recent gala dinner.

“We need the support of everyone in this tremendous community effort,” the association says on its web site.

No county money will be used for the renovation, since the house and the surrounding park are owned by the Citizen’s Association. However, the association expects to receive $17,500 from Ironwood Realty as a result of a condition set for the pending construction of the developer’s Garfield Park project.

The planned Community House renovations will add ADA-compliant bathrooms and a new kitchen to the 85-year-old structure. The building’s exterior will remain much the same, except for the addition of a sunroom facing the park.

Lary Mayer, the association’s vice president for development, says that if fundraising goals are met, the group hopes to break ground on the renovations next year.

Morning Poll: Plastic Bag Ban?

By ARLnow.com

The Arlington County Board is seeking the authority to ban or tax the distribution of single-use plastic bags at retailers in the county, according to the Sun Gazette — but it’s an uphill climb.

Since Virginia is a Dillon Rule state, Arlington must first ask the state legislature for permission to pursue policies not specifically allowed by state law. In past years, the state government has been reluctant to grant Arlington any new taxing power.

Arlington will make its unlikely bag request during the General Assembly session starting Jan. 12.

D.C. has already imposed a tax on disposable plastic bags in an effort to limit their use. Should Arlington follow the District’s example?


Roberto Donna May Be Cooking for His Freedom

By ARLnow.com

Acclaimed chef and convicted tax cheat Roberto Donna just opened a new DC restaurant that he hopes will return him to his former James Beard Award-winning glory. If it doesn’t, he could be going to jail.

Donna pleaded guilty to felony embezzlement this summer, after pocketing about $140,000 in meals taxes paid by customers at his now-defunct Bebo Trattoria restaurant in Crystal City. He received a five-year suspended sentence contingent on the repayment of back taxes. But Arlington County Treasurer Frank O’Leary is not happy the $500 per month repayment schedule that state prosecutors set for the $148,000 in taxes and penalties Donna currently owes the county.

“I am far from satisfied with this pace since, should it continue, we will not receive our last payment until September 2036,” O’Leary said. “In all likelihood, I will not be Treasurer at that point, but you can never tell.”

Should Donna’s financial problems continue — according to a recent Washington Post article, he was nearly $40,000 behind on his mortgage and owed at least $70,000 on credit cards — the chef may be unable to meet his repayments. And should that happen, O’Leary is poised to ask the Commonwealth’s Attorney to send him to jail.

Arlington County authorities, however, apparently are not the only ones after Donna. O’Leary said he believes that Virginia’s tax enforcers and the IRS are close to prosecuting Donna for hundreds of thousands of dollars worth of unpaid sales and employment taxes. He’s also being sued by former employees.

“As far as I can tell, the only organization in the United States of America that’s not after Roberto Donna is the Girl Scouts of America,” O’Leary quipped.

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Budget Recommendation: Cut Programs, Find Efficiencies

By ARLnow.com

At times, the preliminary budget recommendations from Arlington’s Fiscal Affairs Advisory Commission sound more like something you’d hear on CNBC than at a county board meeting. While recommending that next year’s estimated $25-$35 million budget shortfall be made up by a 50-50 combination of spending cuts and tax increases, the commission says that longer-term changes might be necessary.

“The County may have to make structural changes to accommodate continued significant financial challenges,” the commission said in a three-page report to the county board. “Those changes may include improved efficiencies, outsourcing (to realize improved efficiencies and reduced labor costs) and changes in service levels.”

FAAC recommends that the board “require departments to identify and implement operational efficiency improvements,” and “reduce or eliminate funding for programs that are no longer needed, are not effective, or are no longer affordable.”

The recommendations come at a time when the county will be taking on new operating expenses as a result of several major capital projects. Those projects include the Mary Marshall Assisted Living Residence, Artisphere (which opens this week) and the Columbia Pike revitalization project (which includes the assumption of road maintenance costs from the state).

The commission praised the board for balancing priorities during recent budget cycles, calling the past three budgets “fiscally prudent and responsive to pressing human service needs.”

“Arlington has been fiscally fortunate in comparison to many jurisdictions, in part because of a legacy of strong planning and prudent investments,” the report concludes. “However, the fiscal picture remains uncertain, and we believe that the recommendations contained in this report may provide additional options for the Board to consider in the development of the FY 2012 budget.”

County Manager Raises Specter of More Budget Cuts, Tax Hikes

By ARLnow.com

Despite an improving real estate market, Arlington could face up to a $35 million budget gap next year, according to a presentation by County Manager Michael Brown this afternoon.

Brown told the county board that his preliminary forecast anticipates a combined $25-35 million shortfall for the county government and the school system. Brown projects a slight increases in real estate assessments and in tax and fee collections. However, he says expenses are rising due to increasing student enrollment, new school facilities and high county personnel costs.

“Current revenue projections could require program cuts and revenue increases,” Brown said. That’s in addition to the past two years of budget cuts and tax hikes.

“We must continue to be extremely cautious fiscally,” Brown said. He will present his recommended FY 2012 budget to the board in February.

Wondering Why Your Vehicle Assessment Went Up This Year?

By ARLnow.com

At first glance, it does seem pretty suspect. Your used vehicle gets assessed at a value higher than last year, and you have to pay more personal property taxes as a result.

“I always thought one’s car lost value from the time it left the dealer,” a frustrated resident told us in an email. “Not sure how widespread this is, but it’s creating buzz in our neighborhood.”

Actually, it’s fairly widespread. Arlington County bases its vehicle assessments on the National Automobile Dealers Association’s yearly list of vehicle values, which comes out every January 1. This year, the values of many used SUVs, crossover vehicles, trucks and vans went up.

The reasoning behind the increase, says Arlington County Commissioner of Revenue Ingrid Morroy, is that the value of such gas-guzzlers plummeted in 2008 as fuel prices spiked through the roof. Those lower assessments were reflected in last year’s personal property tax bills. But one year later, the prices of big vehicles rebounded as gas prices fell and as manufacturers — in the process of transitioning away from gas-guzzlers — failed to produce enough new SUVs, CUVs, trucks and vans to keep up with demand.

Thus, as supply fell and demand grew, prices for all such vehicles, even used ones, went up last year and are reflected in the higher assessments this year.

“The assessment reflects fair market value,” Morroy said. She added that Arlington is lucky to have “a good mix” of vehicle types, and thus wasn’t hit by the downturn in truck and SUV values as hard as some of Virginia’s rural communities.

Morroy said that any vehicle owner with questions about his or her assessment should call 703-228-3135.

DEVELOPING STORY — County Vehicle Decals and Tax Bills Delayed Due to Printer Problems

By ARLnow.com

By this time, Arlington residents were supposed to have received about 95,000 115,000 vehicle decals and their accompanying 2011 personal property tax bills. But a problem with the printer has delayed the mailings until next week, throwing into limbo County Treasurer Frank O’Leary’s policy, per state law, of getting the bills to taxpayers 30 days before the October 5 payment deadline.

The printer problem wasn’t confined to Arlington. The same printing company is used by at least one other local jurisdiction, we’re told.

In Arlington, the decals must be displayed by November 15, which will give drivers plenty of time. But meeting the October 5 deadline for paying the tax may be more problematic.

“The county is trying to figure out a way to ensure that people have adequate time to pay their bills before any penalties are imposed,” a county source told ARLnow.com. One possibility is waiving the fees for late payments, up to a certain date. (Update: October 15. See below.)

If you don’t want to wait for the bill in the mail, you can pay your taxes online here.

Hat tip to J.A. for the heads up.

Update at 8:00 p.m. — The county has released a press release.

ARLINGTON, Va. – Defective forms have delayed the mailing of some 115,000 personal property tax bills, Arlington County Treasurer Frank O’Leary said today. The problem also affected the cities of Alexandria and Falls Church, all of whom use the same form supplier, Graphic Communications, for their tax bills.

Arlington mailed some 45,000 bills this week, and expects to mail the remaining 70,000 bills next week, O’Leary said. By state law, the bills are required to be mailed no later than 30 days before the deadline for paying them. The County, by ordinance, has established Oct. 5 as the payment deadline for personal property tax.

Due to the delay, the County will only begin to charge penalties on payments received or postmarked after Oct. 15, to ensure ample time for residents to pay their bills.

“It is unfortunate that the bills could not be mailed in a timely fashion this year,” O’Leary said. “We regret this inconvenience for residents and the concern that it has caused.”

O’Leary noted that any additional printing and mailing costs will be borne by the vendor.

“We are glad that a solution has been found that is fair to taxpayers and fair to the County,” said Board Chairman Jay Fisette.

New Additions to Meals Tax Delinquency List

By ARLnow.com

McGinty’s Public House, Tortoise and Hare Bar and Grill and Bob & Edith’s Diner have piled up tax debts to the county over the course of the summer.

McGinty’s (3650 South Glebe Road) owes the county $25,226.64 in unpaid meals taxes, according to the latest list from the County Treasurer’s office, published on August 31. The owner of the Potomac Yard bar opened the massive P. Brennan’s pub on Columbia Pike earlier this year. As recently as July, McGinty’s was not on the delinquent list

Tortoise & Hare (567 South 23rd Street) was also not on the July list, but now owes the county $19,508.46. The Crystal City bar opened three years ago, and regularly hosts live music acts. It is also a popular football destination on Saturdays and Sundays.

Bob & Edith’s Diner (2310 Columbia Pike) is a bit of a surprise, considering that it seems to attract a crowd at all hours of the day. A second B&E’s location further down Columbia Pike shut down a couple of years ago, and the shell company for “Bob & Edith’s Diner II” has been listed on the delinquency list ever since. But the granddaddy Bob & Edith’s is now listed as owing $12,841.15 (B&E’s II owes $36,370.58).

Flickr pool photo by Chris Rief

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