Republican Gov. Bob McDonnell's plan to borrow billions to finance roads cleared a major hurdle Tuesday before a Democrat-dominated Senate budget panel.
The 12-2 Senate Finance Committee vote advances McDonnell's $4 billion transportation funding plan, nearly $3 billion of it borrowed.
A vote is likely late this week by the full Senate, where a handful of Democrats already voiced support. That gives the Senate's 18 Republicans more than the two votes they need for a majority.
The House version of the bill, sponsored by Speaker William J. Howell, R-Stafford, cleared the Appropriations Committee on a 17-5 vote Monday, making a vote by the full House and its friendly GOP majority likely late this week.
The Senate sponsor, William Wampler, R-Bristol, said the bill doesn't obligate Virginia to additional debt, but accelerates borrowing that the General Assembly authorized in 2007. That allows state transportation officials to take advantage of construction prices and interest rates for borrowed money that are among the lowest in recent history, Wampler and other supporters said.
"The bids will probably come in anywhere from 75 cents to 80 cents on the dollar," Wampler said.
The initiative represents the largest infusion of new money into Virginia's cash-strapped highway construction coffers since the state adopted its 17½ cents-per-gallon gasoline tax in 1986. Two governors and every General Assembly during the previous decade considered — and rejected — new taxes to address tens of billions of dollars in backlogged transportation needs, much of it in urbanized northern Virginia and Hampton Roads.
The Finance Committee, however, rejected a McDonnell-backed measure that would devote a share of the existing statewide sales tax to transportation needs in those congested regions. The bill, sponsored by Sen. Jeffrey McWaters, R-Virginia Beach, would have generated about $1 billion over the next six years.
Under Wampler's bill, state would be solely responsible for about $1.8 billion in bonds — $600 million in each of the next three years. Another $1.1 billion in highway bonds would be repaid with federal highway aid. The so-called GARVEE bonds are tax exempt and won't count against Virginia's governmental debt capacity. The state can use credits for money collected on state-owned toll roads to qualify for the bonds.
Lobbyists for the recession-crippled construction and road materials industries praised the measure as a way to resuscitate the business and create hundreds of new jobs.
Sen. R. Edward Houck, D-Spotsylvania, cited the Bible's Book of Ecclesiastes in arguing that the season for compromise had finally come.
"This committee and the Senate has worked tirelessly over the last several years trying to resolve our transportation issues, but the time wasn't right to do it," Houck said. "That Bible passage says 'there's a time to build,' and I think it's time that we build, and pass this bill."
Sen. Mary Margaret Whipple, who voted no, said she was still troubled by the financing plan.
"I don't think anybody would buy a house and say, 'I'm going to pay for it in three years,' when I don't know what the mortgage rates will be or how much it's going to cost to build that house," said Whipple, D-Arlington.
State Sen. Henry Marsh, D-Richmond, the other nay, was unhappy that the Richmond transportation district would receive only 1.8 percent of the revenue from the package.
The committee made an amendment, reducing the general fund surplus McDonnell proposed for the package by $150 million.
McWaters' bill would dedicate part of the statewide sales tax to transportation, generating an estimated $1 billion for new and repaired highways in Hampton Roads and northern Virginia over the next six years.
Democrats on the panel would not tolerate what they considered a raid on the general fund, which pays for such services as public education and public safety.
Senate Majority Leader Richard L. Saslaw, a member of the committee, asked McWaters, "why don't you just cut the nonsense" and boost sales taxes in the affected planning districts by 1 cent.
As the debate grew more edgy, McWaters shot back to Saslaw, "I understand that's your area of expertise, raising taxes."