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The latest version preserves some funding for passenger rail service in Roanoke.
Wednesday, February 20, 2013
RICHMOND — General Assembly negotiators agreed Wednesday to a compromise transportation funding package that would generate about $880 million annually by 2018 and include funding to extend passenger rail service to Roanoke.
But the compromise must be approved by the Senate and House of Delegates in order to reach Gov. Bob McDonnell’s desk. McDonnell, who has made transportation funding a top priority in his final legislative session, urged lawmakers to pass the bill before the General Assembly adjourns Saturday. He said his office then would review the bill “and make any amendments we may deem appropriate.”
“This is a moment to find common ground and get results for the people of Virginia,” McDonnell said. “It is why they have sent us here. Not to argue and posture, but to cooperate and solve problems.”
The 10 House and Senate negotiators finalized a deal Wednesday that would scrap the state’s 17.5 cents per gallon tax on gasoline and apply a 3.5 percent tax on the wholesale price of fuel. The plan also would increase taxes on retail and automobile sales, impose a 6 percent tax on the wholesale price of diesel fuel, and dedicate a greater portion of the sales tax to help fund road, rail and transit needs.
The package would generate a projected $3.5 billion over five years and include additional regional funding provisions for Northern Virginia and Hampton Roads.
The plan would be the most significant transportation funding package passed by the General Assembly since 1986. McDonnell has pressed for a package to align transportation funding with a changing economy and prevent rising maintenance costs from depleting the state’s highway construction funds. In the past decade, the state has shifted more than $3.3 billion in construction funds to cover maintenance needs.
“We are on the verge of addressing one of the largest and most complex public policy challenges in our recent history,” said House Speaker Bill Howell, R-Stafford County.
“It’s a reasonable, sustainable transportation package that gives something to everyone throughout the state,” said Del. Onzlee Ware, D-Roanoke, a member of the House negotiation team.
Sen. John Edwards, D-Roanoke, called the proposal a “classic compromise” and said he intends to vote for it. Edwards said the plan could fund a long-awaited extension of Amtrak service to Roanoke within three years.
“I hope it will get enough votes to pass,” Edwards said. “The way they structured it, it will continue to grow with the economy and inflation.”
But the plan will face opposition in the Republican-dominated House of Delegates, where all 100 seats are up for election this fall. Some tax-resistant GOP legislators were not happy with the compromise Wednesday.
“It abandons all pretense of revenue neutrality advocated by the governor and the House and adopts the tax increases that the Senate had largely advocated,” said Del. Ben Cline, R-Rockbridge County, the House chairman of the legislature’s Conservative Caucus.
The plan would increase the state’s sales tax from 5 percent to 5.3 percent and increase the vehicle titling tax to 4.3 percent. The tax on automobile sales is now 3 percent, or 2 percentage points less than the current retail sales tax rate.
The compromise also would increase the share of the sales tax that goes to transportation from 0.5 percent to 0.675 percent over four years, a concession by Democrats who have argued that the shift would drain funds from education and other vital services. But the compromise also increases the percentage of the sales tax that is dedicated to public schools.
The plan includes $840 million in revenue over five years that is tied to passage of federal legislation allowing states to compel online retailers to collect state sales taxes. If the revenue isn’t realized, the wholesale gas tax could be increased by an additional amount.
The proposal also would impose the $100 annual fee on alternative fuel and hybrid vehicles that McDonnell first proposed last month.
Sen. Ralph Smith, R-Bedford County, called the proposed car titling tax increase “a pretty big hit” and said he has other objections to the bill.
“You’ll have to fix a number of things before I get to yes,” Smith said. Smith did commend Ware for “hanging in there and looking out” for rail funding.
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