Prince William County officials are crafting an ordinance that would implement a tax on plastic bags.
County Executive Chris Martino told the Board of County Supervisors at its meeting Tuesday that officials plan to bring forward additional information about such a tax at the board’s April 6 meeting.
Several residents have been urging the county to implement a bag tax in recent months and use the revenue to fund staff positions focused on sustainability and combating climate change.
Martino said the county probably would not be able to create the infrastructure to implement the tax rate in conjunction with the budget for fiscal 2022, which starts July 1. He said the tax could be approved after the budget.
The Virginia General Assembly approved legislation in 2020 allowing localities to impose a 5-cent tax on disposable plastic bags at grocery, convenience and drug stores, with some exceptions.
The state code requires retailers to collect the tax proceeds in a similar manner to sales and meals taxes. Through Dec. 31, 2022, retailers can keep 2 cents from the tax collected on each bag, with the retailers’ share dropping to 1 cent starting Jan. 1, 2023.
Revenues from such taxes must be for specific activities like environmental cleanup, pollution mitigation and providing reusable bags to people on federal food support programs, according to a staff report to the Fairfax County Board of Supervisors prepared by Fairfax County Executive Bryan Hill.
The Virginia Department of Taxation created a fiscal impact statement with the legislation that said the tax could generate between $20.8 million and $24.9 million in revenue statewide based on similar taxes in Montgomery County, Md., and Washington, D.C.
Hill’s report said that Montgomery County, which has about 1 million residents, received about $2.61 million in revenue in 2017. Hill’s report noted that the revenue would decline over time as customers start using reusable bags, although it will take several years. He wrote that it would be difficult to estimate potential revenues because Virginia’s legislation applies only to certain retailers while Montgomery County’s applies to virtually all and doesn’t have certain exemptions.
Martino has proposed a $1.35 billion budget for the 2022 fiscal year, along with a $1.02 billion six-year Capital Improvement Program. The capital program includes $224.8 million for the upcoming fiscal year.
The budget already comes with a potential 7% increase in real estate tax bills for county homeowners because, although the tax rate isn’t proposed to rise, higher assessments will drive up bills.
The real estate rate has been advertised at $1.125 per $100 of assessed value, but rising property values are expected to increase the average residential homeowner’s tax bill by $306, according to county staff.
The budget proposal says residential real estate values increased by an average of 7%, while commercial real estate values dropped an average of 4.5%. The increased assessments would result in an effective tax increase for residential properties, but a drop for commercial.
The spending plan calls for a $1.60 tax per $100 of value on business computers and peripheral equipment, a 25-cent hike over the current rate. That levy primarily applies to data centers.
The proposal also includes a 30-cent per pack tax on cigarettes, which would be a new tax estimated to generate $3 million in revenue.