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:
* 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.
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.