Virginia House and Senate conferees have apparently agreed to a deal that would create a new plan for state transportation funding - but the agreement still must be approved by the whole legislature.
Meanwhile, the deadline for a deal is looming: the legislature is scheduled to adjourn Saturday.
Wednesday, Senate members of a conference committee agreed to a transportation funding proposal made by their House counterparts. That proposal, as with Gov. Bob McDonnell's original proposal, scraps the state's 17.5-cent gas tax.
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However, this proposal adds a 3.5-percent gas sales tax. It also adds back in a controversial $100 alternative fuel vehicle fee.
The House plan would also increase the vehicle titling fee by 1 percent and would hike the state sales tax from 5 to 5.3 percent, slightly less than what McDonnell proposed.
A GOP House conferee tells News4 their plan would raise nearly $900 million annually for statewide transportation needs by 2018.
Negotiators are still working on specifics of a proposal that would also allow traffic-choked Northern Virginia & Hampton Roads to raise additional revenue locally.
The proposal does divert some general fund money to transportation, though not as much as McDonnell had wanted.
If the General Assembly can pass an accord by its scheduled adjournment Saturday, it would be the first comprehensive overhaul of the way Virginia pays for its highway system the legislature has approved since 1986.
McDonnell released the following statement about the deal:
“It has been 27 years since we have enacted a long-term, sustainable, comprehensive transportation funding plan for Virginia. During those nearly three decades of inaction we have witnessed congestion worsen and the quality of life of our citizens decline. Just this month, the Texas Transportation Institute released a new study finding that our growing immobility has made the Northern Virginia/Washington region America’s most congested area. Virginia Beach is America’s 20th worst. Richmond, the 60th. The inability of Virginians to move quickly around their neighborhoods and cities comes with a major financial price tag. The Institute estimates our congestion costs drivers in Northern Virginia $1400 a year. It costs drivers in Virginia Beach $877 per year and drivers in Richmond $581 per year. The bipartisan failure to address our transportation needs for almost three decades has cost every citizen of this state thousands of dollars, and countless hours of time that could have been spent at home and at work. This year, we have finally worked together, across party and regional lines, to fix this quality of life issue.
On January 8th, when we launched our effort to fix transportation, we laid out three broad goals. First, we called for decreasing Virginia’s reliance on the steadily decreasing transportation revenue source of the gas tax. As cars get significantly better mileage, and more Americans choose more alternative fuel vehicles, it is an inescapable fiscal reality that the gas tax is no longer a dependable, long-term sustainable source of transportation revenue. The plan agreed to today achieves that goal. By eliminating the current form of gas tax in Virginia, the amount Virginians will pay at the pump will be reduced by an estimated 6 cents per gallon. That means Virginians filling up a 15 gallon tank will save .90 cents each time they go to the gas station. If they fill up once a week they will save almost $50 a year. In total, it is estimated that this change will save motorists $272 million in fiscal year 2014 alone.
Second, we made clear that future transportation funding in Virginia must be much more closely tied to the existing sales and use tax, which tracks economic activity. The agreement reached today does that by matching a reduction in gas taxes with an attendant, slight .3% increase in the sales tax, with the new revenue going to transportation. This change in funding mechanisms will allow future transportation revenue to grow in tandem with the economic prosperity of the Commonwealth. Every Virginian relies on and benefits from our transportation system. Tying transportation funding to a tax that every Virginian pays is a common-sense move. In addition, the sales tax is a less regressive tax than the gas tax.
Finally, we stated that transportation is a core function of government. The responsibility of state government to provide for roads and rail is equal to our responsibility to provide world-class schools for our children and public safety in our communities,. That means transportation must be treated like a core function of government, and it must share in our growth in general fund revenues to a greater extent than currently structured. This conference report will generate almost $200 million per year in year five in new general fund money for transportation, and nearly another $200 million in new general fund money from collecting the existing state sales tax under an anticipated federal law. This is a recognition that transportation is vital to the future prosperity and economic well-being of the Commonwealth, and it must be treated as such. It makes transportation a priority in Virginia’s budget.
The statewide component of this plan is revenue neutral in the first year for nearly all Virginians. This innovative tax reform bill provides critically needed new funding for our transportation system through the utilization of tax reform and the general fund. The bill also includes regional self-help provisions that have long been sought by legislators and local government officials in Hampton Roads and Northern Virginia, the two most congested regions of the Commonwealth.
In my State of the Commonwealth Address, I said we must not end this session of the General Assembly until we had fixed transportation. This bill accomplishes that. I also promised that in any comprehensive plan there would have to be, by simple legislative necessity, components that not everyone would like. That’s the nature of a comprehensive piece of legislation that must pass a diverse legislature. This bill certainly, depending on the philosophy of each individual legislator, does that. But the important thing is we now have the comprehensive transportation funding plan that has eluded Virginia for 27 years. Now it is time to vote.
As the conference report heads to a final vote in the General Assembly, this is our collective opportunity to join together, as Republicans and Democrats, to solve one of Virginia’s most intractable and longstanding problems. This is a moment to find common ground and get results for the people of Virginia. It is why they have sent us here. Not to argue and posture, but to cooperate and solve problems. With the approval of this transportation plan we will strengthen Virginia’s economy, help create thousands of good paying jobs, and improve the lives of every Virginian in every city and county. I urge the members of the General Assembly to approve this bill. Following that vote our office will conduct a thorough legal and policy review, as we do with any piece of legislation, and make any amendments we may deem appropriate.”