If this report [1] is true, then it appears Governor McDonnell willing to make just about any sort of deal on transportation. Such a deal, though, may require sacrificing the centerpiece of his current proposal: the elimination of the gas tax…
When asked about whether the elimination of the gas tax would survive negotiations, Howell told reporters that lawmakers were considering its removal.
“I think what comes out of the conference committee will be somewhat different than what goes in,” Howell said. “That [gas tax element] could be a change.”
Lawmakers from both parties and transportation experts say a deal also may require Republicans to raise revenue, perhaps by agreeing to index the gas tax to inflation or boosting the sales tax, while Democrats may have to budge on their refusal to use general fund revenue on roads and highways. A deal may also have to address the desire by cities and urban counties, such as Fairfax and Arlington, to include regional funding options.
The Speaker has made it clear that some sort of regional funding mechanism is on the table. And that may help explain why Sen. Walter Stosch’s bill [2] to give certain localities the ability to impose income taxes that neither require a referendum nor expire has made its way (with ample Republican votes) through the Senate. Now that bill has finally gotten some wider notice:
When the transportation bill moved through the House, Northern Virginia delegates from both parties were largely united in their concerns that the General Assembly grant them the authority to find regional funding solutions. But they also want to make sure that Richmond doesn’t use regional funding plans as an excuse to foist most of the funding responsibility onto urban localities when it should be the responsibility of the state.
As a result, several expressed alarm over a measure — passed by the Senate and sponsored by Sen. Walter A. Stosch (R-Henrico) — that would make it easier for some jurisdictions to impose a local income tax to pay for roads.
The standard line is this would let the state off the hook for funding transportation. Maybe, maybe not. Several large local governments have had the power to put such taxes to referendum, but none have. It’s also critical to note that Stoch’s bill would lift the restriction in existing law that any such revenues be used for roads.
But an even bigger concern is what the compromise looks like when the wheeling and dealing is done. If it’s tax hike bill, as opposed to a transportation fix, then Republicans will have voluntarily fallen on their swords. It’s made worse if they surrender the Governor’s proposal to eliminate the gas tax. Problematic as that approach is, it has the singular advantage of wiping out a tax. That’s the selling point. Drop it, and what’s left is a dog’s breakfast of tax hikes leavened with regional mumbo-jumbo that may or may not do a thing to fix transportation.
It will also force AG Ken Cuccinelli to make a choice: support the plan, and stick with Bob and the GOP leadership, or walk way and offer something entirely different.