The Prince William County staff has recommended against increasing the commercial real estate tax to raise more than $17 million annually for roads because it could hurt the county’s efforts to lure new business. Although the county is faced with $344 million in unfunded transportation needs over the next six years, a budget analysis showed that its office vacancy rate has more than quadrupled in the past five years.

Rejecting the tax increase likely would set the county apart from other Northern Virginia jurisdictions — including Alexandria, Arlington and Fairfax — that are considering raising commercial property taxes by 0.25 percent next year. The General Assembly granted four Northern Virginia counties and five cities the authority to raise the tax to help pay for transportation projects.

“We’re never going to do that,” Prince William County Chairman Corey Stewart told The Examiner. “We’re not going to subject our businesses to that kind of tax when our neighbors to the south aren’t subject to the same kind of tax.”

Jurisdictions the county competes with to lure new business, including Stafford County, Spotsylvania County and Fauquier County, do not have the option to raise the commercial property tax and would use that to their advantage when courting businesses, Stewart said.

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But rejecting the tax would cost the county millions each year for top priority projects that might not be built without the higher tax. Stewart said because the county already funds transportation projects with local taxes, including a $300 million bond voters approved in 2006, more local roads taxes are unappealing.

A county budget assessment last month noted that although apartment properties are doing well, the office space vacancy rate jumped from 3.2 percent in 2002 to 14.3 percent in 2007 as developers built 1.75 million additional square feet of office space for a total of almost 5 million square feet.Stewart, a Republican, used the issue to push Gov. Tim Kaine, a Democrat, for more state transportation funding instead of “being hell-bent” on approving new prekindergarten programs.

But Kaine spokesman Gordon Hickey said the governor remains committed to expanding early education.

dgenz@dcexaminer.com