An Open Letter to the Alexandria City Council: Do We Really Need a Business Improvement District?

Dear Councilmember:

As the head of the National Taxpayers Union (NTU), a tax exempt, non-profit organization that owns property lying within the boundaries of the proposed Business Improvement District (BID), I write to express deep reservations regarding this scheme. Under the proposal now before the Council, commercial property owners (and perhaps organizations like NTU that also happen to be landlords), would see their property tax assessments increased in order to pay for certain projects that would ostensibly "revitalize" the King Street Corridor within Old Town.

First of all, in my experience at the helm of a 350,000 member citizen group that has studied tax and fiscal policies nationwide, I view Old Town as particularly ill-suited for a BID. Old Town is already a vibrant community with a wide array of restaurants, art galleries, and businesses that make it one of the most popular destinations in the Washington, DC area for tourists and locals alike. As Old Town is also the heart of Alexandria and a significant part of the tax base, it is hard to believe that city leaders overlook the area in prioritizing services.

Second, if any part of Alexandria is suffering from less-than-adequate services (an analysis with which I do not concur), this is the result of misplaced priorities by our elected leaders rather than inadequate total spending. The fact is that spending growth in Alexandria has been quite rapid in recent years. I have added a chart to the end of this letter that illustrates the point that spending continues to grow far faster than inflation. The city was flush with revenues even before adding a $3.00 cell phone tax, a cigarette tax increase of 20 cents per pack, and a new admissions tax to the revenue stream.

Unfortunately, when revenue is plentiful, most elected officials will simply increase government spending rather than reduce tax collections appropriately. That has clearly been the case in this city. Spending in Alexandria grew 47 percent between 2000 and 2005 (from $356 million to $523 million) and, based on 2006 budget figures (which project spending will rise to $566 million), spending will have jumped by an astounding 59 percent in the city in just seven years. This rate of revenue growth is a clear indicator that if any part of the city is suffering from "inadequate services," then the underlying cause is either financial mismanagement or a simple lack of desire to provide those additional services on the part of elected officials.

There is no need to act rashly in advocating a new tax on some Alexandria businesses. At the very least, BID supporters should present their arguments in a series of hearings before the City Council so that all of us who will be affected may fully participate in this process. It is my strong belief that any supposed service inadequacies can be addressed using existing tax revenue.


John Berthoud