B4 EZ RE THE WASHINGTON POST.MONDAY, MARCH 7 , 2022
think tank.
The House version, for in-
stance, would require the team to
dedicate at least half of revenue
from stadium naming rights —
something worth potentially
hundreds of millions of dollars —
to cover the debt service. The
Senate version would allow the
team to pocket that revenue.
The House bill allows the sta-
dium authority to take a share of
sales tax revenue generated in the
“facility” and “campus” for 20
years or until the bonds are paid
off, whichever comes first. The
Senate version has no time limit
and includes sources of tax rev-
enue beyond sales tax — includ-
ing personal income tax revenue
generated within the “facility,” the
team’s corporate income tax rev-
enue and pass-through-entity tax
revenue.
Both bills would also allow the
stadium authority to take a share
of local taxes, if the localities
agree.
“The differences are stark be-
tween the two,” said Del. Mark D.
Sickles (D-Fairfax), a House Ap-
propriations Committee member
who said team representatives
told him “the House bill would
never suffice, would never be
enough to lure the Washington
Commanders to Virginia.”
The Senate bill does have some
restrictions not found in the
House version, including a provi-
sion that would exclude revenue
from sports betting and e-com-
merce.
The Commanders are contrac-
tually obligated to play at FedEx
Field in Landover u ntil 2027, after
which they could stay or seek
another home. The team has been
shopping for a new home for
years in Virginia, Maryland and
D.C.
Maryland and D.C. have
stepped up their efforts in recent
weeks as the proposal in Virginia
has advanced and as the team has
rebranded with a new name to
replace one widely viewed as rac-
ist.
All three jurisdictions are ac-
tively courting the team at a time
when some members of Congress,
including Rep. Don Beyer (D-Va.),
are calling for the elimination of
tax subsidies for new pro sports
stadiums.
Congress also has been calling
on the NFL to release the details
of its investigation of the team’s
workplace, including allegations
of widespread sexual harassment.The GOP-controlled House of
Delegates and the Democratic-led
Senate passed separate bills in
February by wide, bipartisan
margins.
With the General Assembly set
to adjourn in a week, a conference
committee appointed Wednesday
was set to start ironing out differ-
ences between the House and
Senate versions.
At least one of the conferees,
Sen. Adam P. Ebbin (D-Alexan-
dria), said he was wary of the
broad language.
“While I question whether we
should even be paying for the
stadium at all, this deal is so
broad you could drive a truck
through it,” he said. “It needs to be
reined in significantly. ... We don’t
need to pay for Daniel Snyder’s
hotels, and his restaurants and
offices that he rents out to other
parties.”
The Senate bill is more gener-
ous than the House version, ac-
cording to an analysis by the
Commonwealth Institute, a fiscalwithout specifying that they be
located in the stadium, potential-
ly applying to an Armani store
near the venue as much as a
Commanders merchandise shop
inside.
The definition also covers
“lodging,” office space for tenants
other than the team, and “other
properties on a site specified by
the team and consented to by the
Authority and the county/city
[where the facility is located].”
The person close to the team
said there is no intent to include
things in the “facility” that are not
“contiguous and closely related to
football operations.” He noted
that local officials would have to
consent to what’s included in the
“facility,” calling their power “the
check in that system.”
Legislation to create a football
stadium authority to oversee the
financing and construction of the
stadium has been well received in
Richmond. Gov. Glenn Youngkin
(R) gave it a shout-out in January
in an address to the legislature.but we think that generally would
occur in the context of a strong
ongoing relationship that might
need upgrades,” he said. “And just
like the initial offering, would
obligate the team to stay and play
until those bonds are paid off or
defeased.”
Saslaw said Saturday that he
will move to make sure the bonds
can only be issued once and can
only finance the stadium. “When
the bill comes out of conference, it
will be drawn tight as a drum,” he
said.
Saslaw’s bill — like the House
version sponsored by Del. Barry
D. Knight (R-Virginia Beach) —
makes a distinction between the
“facility” that the bonds would
finance and the broader commer-
cial “campus.”
But “facility” is defined expan-
sively. It includes things typically
associated with a sports venue:
the stadium itself, practice fields,
team offices, concessions and
parking garages. But it also in-
cludes restaurants and retailwho is chairman of McGuire-
Woods Consulting. “If that needs
to be clarified in the bill we will
certainly do so.”
After this article was published
online, Bowles said Saturday af-
ternoon that he has proposed a
revision to make that intention
clear. “We’ve prepared language
to ensure that nothing other than
a portion of the stadium can be
funded,” he said.
Commanders spokesman Joe
Maloney declined to comment.
Another person close to the
team’s efforts in Richmond, who
spoke on the condition of ano-
nymity to discuss ongoing negoti-
ations, acknowledged that under
the Senate bill, the team could
repeatedly issue new 30-year
bonds, “starting the clock all
over” for the new debt. But he
suggested that would keep the
team at the stadium that much
longer.
“We recognize that the Senate
version of the bill gives the au-
thority to issue debt in the future,concert venue, hotels, restaurants
and housing. Tax revenue gener-
ated from that broader develop-
ment would go toward paying
down bonds, but it was widely
understood that the bonds would
finance construction of only the
stadium.
In reality, language in both the
House and Senate bills says the
bonds would finance a “facility,”
yet the legislation defines that
term so broadly that it could en-
compass the entire development.
“I don’t think it should be
called the ‘stadium authority,’ ”
said Michael D. Farren, a senior
research fellow at the Mercatus
Center at George Mason Univer-
sity. “I think they should call it the
‘Snyder City authority.’ ”
Neither bill caps the amount of
money that can be raised. And
while the House bill limits the
bonds to 20 years, the Senate
version would allow the stadium
authority to issue new bonds in
perpetuity — and collect the tax
revenue to pay them down — to
finance new construction, expan-
sion, repairs and maintenance.
“It’s an endless gravy train of
subsidies,” said Farren, whose re-
search focuses on the effects of
government favoritism toward
individual businesses and indus-
tries. “As long as we keep some
bonds active, we can keep the
gravy train rolling. I don’t think
that in reality you would ever see
everything paid off.”
Farren’s assessment runs coun-
ter to how legislators have been
pitched on the idea.
“All the stuff outside the sta-
dium is Snyder’s obligation, 100
percent,” Senate Majority Leader
Richard L. Saslaw (D-Fairfax),
who sponsored the bill in his
chamber, said in an interview
Friday.
A lawyer and lobbyist for the
team said Saturday morning that
the language will be tightened if
needed. But he noted that the
definition of “facility” — includ-
ing references to restaurants,
non-team office space and lodg-
ing — was taken directly from a
portion of state code created in
1995 with hopes of attracting a
Major League Baseball team to
Virginia.
“There is certainly no intent for
the authority to be used for any-
thing other than to help finance a
portion of the stadium and noth-
ing else,” said Mark T. Bowles,
STADIUM FROM B1
Va. bills to lure Commanders could offer unlimited tax dollars for ‘mini-city’
STEVE HELBER/ASSOCIATED PRESS
Senate Majority Leader Richard L. Saslaw (D-Fairfax), who sponsored the bill in his chamber, said he will move to ensure the bonds can
only be issued once and can only finance the stadium. “When the bill comes out of conference, it will be drawn tight as a drum,” he said.et proposal but not the Senate’s.
“Obviously, anything that
threatens the sustainability of
that funding source, we have con-
cerns with,” she said.
Transportation advocates have
mobilized to urge the legislature
not to repeal the grocery tax
without first finding a replace-
ment source for transportation
funding. Some said the savings at
the grocery store will come at a
high cost in the long term, affect-
ing the very services — such as
public transit — on which lower-
income residents depend.
Stewart Schwartz, executive
director of the Coalition for
Smarter Growth, said a loss of up
to $750 million in the next five
years would delay the mainte-
nance and critical repair of
b ridges and roads. Besides reduc-
tions in transit service, he said,
the state could also put in jeopar-
dy the effort to grow passenger
rail service over the next decade.
“We are very concerned about
the impact on rail and transit,
especially on operating funding
when we know we’ll face an oper-
ating funding cliff,” Schwartz
said.
Despite those concerns, Sick-
les, the delegate from Fairfax,
said that in Richmond, “everyone
is just resigned to the fact that the
money’s going away.” And al-
though he understands the con-
cerns of local lawmakers, he add-
ed, “This is not the end of the
world.”
Falls Church City Council
member David F. Snyder said he
doesn’t oppose efforts for tax re-
form to help low-income Vir-
ginians. But having no firm re-
placement source of revenue
would only shift the burden to
localities, he said. If there is no
long-term replacement for school
funding, some would have to turn
to increasing local taxes or de-
grading fundamental services
such as police, fire and education
programs.
“It’s just a classic example of
state officials going after short-
term political gain at the cost of
localities and our citizens,” Sny-
der said. “Richmond engages in
grandstanding by telling people
that they need to pay less in taxes,
while the burdens to local govern-
ment increase.”Lazo reported from Washington.replaced.
“You can’t take it away this year
when you have a massive surplus
and convince us it’s going to be
magically restored in a future
budget,” McKay said. “That’s just
not going to happen.”
Some supporters of the grocery
tax repeal have cited funding
from the federal infrastructure
bill, approved in November, as a
significant resource for the state.
Those federal dollars, however,
aim to provide for capital projects
through the next five years, and
local officials say they don’t antic-
ipate any of the funding will
support maintenance and transit
operating costs.
Meanwhile, Youngkin is also
pushing for a freeze of a 5 cent-
per-gallon gasoline tax increase
that is set to go into effect in July.
The fuel tax was part of the 2020
legislation that was meant to
increase funding for transporta-
tion spending.
The Northern Virginia Trans-
portation Commission, which is
charged with funding Metro and
VRE, opposes any change to the
progression of the fuel tax in-
crease, Mattice said. The freeze
was included in the House’s budg-funding for transportation
spending, including road and rail
programs.
The elimination of the grocery
tax revenue would break that
law’s promise of a reliable fund-
ing stream to end years of de-
ferred maintenance and opera-
tional constraints, Alexandria
City Council member Canek Agu-
irre (D) wrote in a Feb. 21 letter to
legislators on behalf of the North-
ern Virginia Transportation Com-
mission.
Some local lawmakers said the
proposed tax cut echoed previous
actions taken by the Virginia leg-
islature in 2018, when it diverted
$102 million in annual regional
transportation funding from lo-
calities to Metro.
While the action created a
funding stream for Metro, McKay
said, it was never fully replen-
ished — and came at the expense
of other critical projects through-
out Northern Virginia. In Fairfax,
he said, the funding reductions
have slowed progress on several
road projects, including the Fair-
fax County Parkway widening, as
well as some bicycle and pedestri-
an projects throughout the coun-
ty. Those funds still haven’t beenthe price of gas going up.”
But transportation officials say
that funding is temporary and
that some is limited to capital
projects, meaning it may not sup-
port maintenance and transit op-
erating costs. Come fiscal 2 026,
Mattice said, the region would see
a significant funding gap.Only two years ago, a major
piece of bipartisan legislation in
Virginia established dedicated
funding sources for transporta-
tion, ensuring an increase incording to Del. Vivian E. Watts
(D-Fairfax). (Youngkin is advo-
cating for the House’s approach
to education money, which would
cement a long-term replacement
from the state.)
“The bottom line is that it
introduces a level of risk to local
governments that they’ve never
had before,” said Del. Mark D.
Sickles (D-Fairfax), a member of
the House Appropriations Com-
mittee.
In Fairfax County, the largest
jurisdiction in Virginia, the local
tax generates about $35 million
for schools annually, plus another
$35 million for the general county
budget. It’s a sum high enough
that Board of Supervisors Chair-
man Jeffrey C. McKay (D-At
Large) wrote a letter to the Gener-
al Assembly spelling out the po-
tential effects on his county of
1.15 million people.
“We can’t keep eliminating
t axes at the state level and have
the result of reducing revenue to
the localities that need it,” he said
in an interview. “I don’t have a
way to replace millions in schools
funding, and certainly nowhere
do people tell me our transporta-
tion funding is adequate.”
If the grocery tax is cut, North-
ern Virginia would lose about
$8 million for transit annually,
said Kate Mattice, executive di-
rector of the Northern Virginia
Transportation Commission. The
group is urging the legislature to
establish a replacement funding
stream if the tax is eliminated.
“These are the predictable
funding that our localities need to
pay their [Metro] b ills, to pay
their [Virginia Railway Express]
bills, to pay for their own transit
systems and to put in place new
programs like the new [Bus Rapid
Transit] system along Richmond
Highway,” Mattice said.
The grocery tax is one of sev-
eral funding sources that the
state uses to pay for transporta-
tion. In the short term, backers of
the repeal point to a surplus and
other funding available for trans-
portation they say will make up
for revenue losses.
“We’ve got more money in
transportation funding than we
ever expected,” said Del. Barry D.
Knight (R-Virginia Beach), chair-
man of the House Appropriations
Committee. “And it looks like it’s
going to continue that way withcampaigns on defunding trans-
portation, and yet in the politics
of expediency, it’s a very easy vote
to cast,” said Del. Danica A. Roem
(D-Prince William). “What are
you going to replace that revenue
stream with?”
Lawmakers from both parties,
including the Democratic-con-
trolled Senate, have expressed
support for repealing the state’s
1.5 percent tax on food and hy-
giene products, calling it a regres-
sive measure that most negatively
impacts low-income Virginians.
Former governor Ralph Northam
(D) had backed its repeal in a
budget proposal he submitted
before leaving office.
But Youngkin has gone fur-
ther: Citing the commonwealth’s
hefty budgetary surpluses, he and
the GOP-controlled House of Del-
egates have proposed cutting the
1 percent grocery tax levied by
localities. The governor touted
that plan at stops last month
around the commonwealth, in-
cluding at an Alexandria super-
market, and again in a letter
Friday to key lawmakers.
“I urge you to consider the
unprecedented financial position
of the Commonwealth and the
unique opportunity that this cre-
ates for all of us to accomplish
many important goals at the
same time,” Youngkin wrote. “The
opportunity to address so many
of our shared priorities, including
significant tax relief, in this time-
frame is extraordinary.”
The total cuts would mean a
revenue reduction of up to
$700 million every year to the
commonwealth and its localities,
according to estimates from the
Department of Taxation.
The House and Senate have
offered separate plans that would
replenish much of the tax rev-
enue given to localities. But nei-
ther replaces the portion that
goes to transportation, an annual
yield of about $135 million that
helps pay for road repaving and
maintenance, as well as for the
operations of public transit sys-
tems.
Under the Senate’s draft, there
is also no guarantee in future
budgets that localities would con-
tinue to get a portion of the tax
specifically allocated to schools —
about $280 million statewide, ac-
TAX FROM B1
N.Va. officials fear grocery tax cut will derail transit funding
ROBB HILL FOR THE WASHINGTON POST
Virginia Gov. Glenn Youngkin speaks at a Safeway in Alexandria last month to promote his plan to cut
the state’s sales tax on groceries. Lawmakers from both parties have expressed support for the repeal.“No one who runsfor office campaignson defundingtransportation, andyet in the politics ofexpediency, it’s a veryeasy vote to cast.”
Del. Danica A. Roem
(D-Prince William)