Yes, Virginia, You Do Pay More in Taxes, Part II

Source: County Executive Budget Presentation

Continuing my occasional series, today, I look at commercial tax rates. Considering the bellyaching by business over the difficult climate in Montgomery, especially compared to Fairfax, you’d think we really dun them on taxes.

Turns out that’s not the case. Our commercial tax rates are lower than all of our major regional competitors in Virginia, DC and Maryland. Commercial taxes in both Fairfax and DC are over 50% higher than in Montgomery.

Thinking about not only this chart but other available information, I draw two conclusions that may seem opposed but are utterly compatible.

It’s Never Enough

No matter what Montgomery does, it will never been good enough for the business community. A case in point is the reaction to the major zoning changes adopted by the previous County Council. These changes greatly simplified the code and made it much easier and quicker for developers to move forward with projects in Montgomery.

Based on the chatter today, you’d never know this occurred. The major complaint of Empower Montgomery’s action plan to improve the business climate last year was to ease further limits on development without demanding any further contributions by developers.

These complaints continue even as the County continues to take a very friendly attitude towards development. For example, after adopting a zoning plan that increased the value of land around White Flint tremendously, we are dropping millions to build a new Metro access tunnel.

Yes, the new tunnel will make it easier for pedestrians to access Metro safely but it will also increase the value of properties in the area. Perhaps the developers should kick in for it?

All of this is just the business community acting sensibly in its own interest. I am no more surprised by it than I am that unions want higher salaries with more benefits. It doesn’t make them evil, but it also doesn’t mean that we have to swallow their narrative whole.

Other Real Barriers Exist

Like all good narratives, the Montgomery is hostile to business narrative mixes up fact and fiction. The fact remains that commercial business growth remains very poor in Montgomery, as Adam Pagnucco has explained in-depth previously.

Montgomery faces real challenges when it comes to business. They just aren’t necessarily the ones we hear about related to taxes and development that seem to attract the loudest moans because of developer muscle in the county.

I hope to explore some of these in the future. Some are easier to solve than others. We could do more to make the county bureaucracy nimbler, market the county, and support local small businesses. The County Council could spend less time on sideshows and more on our major challenges. It’ll be a harder lift to move Montgomery closer to a major airport.

In response to the first post in this series, I heard a lot about the impact of income taxes in the county. I plan to take a look at our overall tax burden including income taxes in Part III.