Virginia Attorney General Cuccinelli Files Brief Defending Discriminatory Property Tax
July 1, 2010
I sent Virginia Attorney General Ken Cuccinelli a letter today, criticizing his office’s amicus curiae brief in FFW Enterprises v. Fairfax County.
The case involves newly enacted special property taxes on property near what will be new Metrorail stations, with the revenue used to help fund the Dulles Metro extension. Such tax-benefit districts are common and justified under a “benefits conferred” approach whereby those who benefit from the spending are those who pay the taxes.
This case is different because Fairfax will impose the taxes only on commercial property. Residents and travelers will benefit at least as much, if not more, from the Dulles Metrorail improvements, so a tax only on commercial landowners within the geographic area surrounding the stations cannot be justified under a “benefits conferred” approach. Special district taxes for benefits from the Metrorail should be imposed uniformly over the taxing district, not arbitrarily on some types of property.
The Virginia Constitution limits policymakers’ discretion in defining taxation categories in this context. Fairfax County and, unfortunately, your brief, argue that because the Uniformity Clause only requires uniformity “among the same class of subjects,” the General Assembly is free to define the class however it wishes and survive any Uniformity Clause challenge. (Your 8-page brief does not even attempt to explain or justify the General Assembly’s arbitrary action against taxpayers, instead pasting a page of text from the trial judge’s opinion musing about possible rationales.)
If such a theory survived constitutional scrutiny, legislative classifications could routinely overburden select groups of private property to finance benefits enjoyed by the broader public. Such classifications could then be prone to a federal takings challenge because as a classification becomes increasingly specific to a certain type of property, a tax based on benefits conferred takes the nature of an arbitrary deprivation of property without due process.
The General Assembly’s chosen route to raise revenues for the Metrorail construction may be administratively and politically convenient, but it creates exactly the type of discriminatory tax classification that the Virginia Constitution was designed to prevent. The General Assembly should not have the power to burden specific types of private property for public benefit under the guise of district-wide taxes. The state, and the state’s Attorney General, has an obligation to protect taxpayers from such arbitrary actions.
For more on the FFW case, see here: http://www.taxfoundation.org/legacy/show/26381.html