Senate Finance committee scrambles McDonnell road billPoliticsVirginia

The Senate Finance committee performed major reconstructive surgery on the Governor’s transportation bill on Tuesday, and what emerged is a tax hike, coupled to a prayer for money that doesn’t yet exist. The Governor’s signature approach of killing the gas tax? It’s gone (with the help of Republican votes). The Northern Virginia Transportation Alliance broke down the bill’s basics as follows:

Gas Tax

* Increases gas tax by 5-cents to 22.5-cents per gallon and indexes rate to Producer Price Index for Non-Residential Construction.

* Imposes 1% sales tax on wholesale gas and diesel fuel. Proceeds to jurisdictional accounts maintained by VDOT for local or regional construction projects. If Congress does not approve the Marketplace Equity Act this sales tax increases to 2%.

Existing Sales Tax – Increases percentage of existing sales tax dedicated to transportation from 0.5% to 0.55% with proceeds to statewide rail and transit programs. Governor’s proposal calls for 0.25% increase to 0.75%.

Vehicle Registration Fee – Increases by $15 with proceeds to statewide rail and transit programs. Same as Governor’s proposal.

Marketplace Equity Act – If enacted by Congress, all proceeds dedicated to transportation with the exception of 1% for education.

REGIONAL
Local Option Tax – Authorizes localities to adopt sales tax of up to 1% for local transportation purposes. Requires adoption by local governing bodies (not regional authority) and can be used for local road, rail or transit projects approved by the Commonwealth Transportation Board, or toll abatement.

Marketplace Equity Act Local Revenues – Requires half of local option tax from Marketplace Equity Act to be used for transportation.

Lots of moving parts and a lot of actions shifted to local governments and Congress.

Nothing in the bill about setting priorities for projects that will ease congestion, increase safety, or deliver the most return on investment. Nothing about breaking up the Byrd system that perpetuates the current transportation mess we are in. But that’s asking a lot of the native political class, particularly when it is in such a furious hurry to do something.

No doubt the House will refuse these amendments and the whole mess will be hashed-out in conference. Regardless of what the conference produces, it will be complicated. And I maintain that within five years, we will be right back where we are today.

But here is one modest proposal: given the nature of all the proposed fixes, and their potential to include taxes imposed at the local level, it would be wise, and even essential, for the conference committee to conduct its work in the open. Let the sunlight in, fellas, so everyone can see what deals are cut and why before the compromise lands on legislators’ desks.

  • Mike Barrett

    Your skeptism is well founded; this will be perceived as a statement of retreat for no tax republicans. But of course, if they sabotage a transportation bill, there is no doubt that many of them will pay the political price on November 5th. The bill that came out of Senate Finance, and is expected to be passed by the full Senate today, will likely have full support from Democrats willing who admit that the no tax republican caucus in the House has made a terrible mess of our transportation infrastructure, and voters throughout this Commonwealth are fed up up with their emphasis on tolls, with congestion, with destruction, and with republican intrastigence.

    Now from the Governor’s statement after the vote, it seems to me the writing is on the wall that he wants an agreement, and while he may agree to negotiate, the fact is he wants an agreement as much as democrats do. Since the action yesterday contains just about everything that Democrats want, he will have little leverage to start taking that away.

    To the die is caste for a solution to transportation. The amount is likely not enough, but it goes a long way toward the investments we need to reverse the decline of transportation in the Commonwealth. I hope your side understand that.

  • Mike Barrett

    So now that the full Senate has acted and passed trasnportation form, this could be an historic moment if the House realizes that if they kill transportation reform, the onus will be on them. The Senate democrats and six repubicans seem to have decided that it is time to stop the destruction of our transportation infrastructure and to develop a funding plan that sustains and improves transportation for at least another decade.

    The alternative, that is, continued commitment to the “no tax” ideology of
    House republicans means continued decay, loss of federal funds, and the
    potential for serious safety issues as infrastructure crumples and wears away. It is
    inconceivable to me that House republicans would fail to support this Bill, but if
    history is any guide, that is exactly what they will do.

    Hard to believe that elected officials elected to govern would fail to step up to the requirement to do the right thing. Let us hope this Bill can be negotiated and passed this session.

  • Mike Barrett

    I do not know how this will work out; it may collapse under the weight of
    republican intrasigence. But even if it does, in a sense, this is the beginning
    of the end of the era of no taxes.

    That era has been a disaster for this Commonwealth, making the state a
    laughstocking of late night television, but worse, destroying the fabric of our
    society in transportation, K-12 education, state support for colleges and
    universities, support of our state employees, and a medicade program so stingey
    it rates 49th amoung the states.

    We are not a state without resources; we are a state that intentionally has
    adopted the ideology of Grover Norquist. Our delegates has embarked upon an
    intentional policy of reducing the capability of our Commonwealth to perform
    across the board. These delegates and senators prefer deregulation,
    privatization, and small government, and the results of the last 20 years
    demonstrate the paucity of results from this strategy.

    Will this negotiated transportation initiative change all that? The best I
    can say is that now that some enlightened republicans have seen the effects created
    by Norquist’s ideology, and as more and more citizens and voters realize it does
    not have to be this way, we will develop a more civil and competent cadre of
    elected officials for whom the constant pursuit of low taxes is not an end into
    a of itself.