The compromise plan would pump $3.5 billion into roads, rail and transit over the next five years.
Saturday, February 23, 2013
RICHMOND — After weeks of starts, stops and near crashes, a bipartisan coalition of state legislators has delivered a long-awaited transportation funding package to Gov. Bob McDonnell.
After some last-minute drama that threatened to derail the deal, the Virginia Senate on Saturday passed a compromise plan that will pump $3.5 billion into roads, rail and transit over the next five years. The Senate’s 25-15 vote came one day after the House of Delegates passed the bill with a bipartisan majority.
“This is a historic day in Virginia,” McDonnell said in a written statement today after the Senate vote. “We have worked together across party lines to find common ground and pass the first sustainable long-term transportation funding plan in 27 years. There is a ‘Virginia Way’ of cooperation and problem solving, and we saw it work again today in Richmond.”
The transportation deal may stand as the signature legislative achievement of McDonnell’s four-year term, which ends in January. The governor made the issue a top priority in this legislative session, and pushed for a compromise even after his own plan was overhauled and members of his own party voiced dissent.
The bill heading to McDonnell’s desk differs from the proposal he outlined on the eve of the General Assembly session in January, and McDonnell said he will offer amendments “that may be appropriate.” The legislature will reconvene April 3 to act on the governor’s amendments and vetoes.
But McDonnell said earlier in the week that the compromise met the three broad goals contained in his original plan: It reduces reliance on the gas tax, makes greater use of sales tax revenue, and shifts nearly $200 million from the state’s general fund to transportation by 2018.
The plan would scrap Virginia’s 17.5 cents per gallon tax on gasoline and apply a 3.5 percent tax on the wholesale price of fuel and a 6 percent tax on the wholesale price of diesel fuel.
The legislation also would increase the retail sales tax from 5 percent to 5.3 percent, increase the vehicle sales tax from 3 percent to 4.3 percent, and dedicate a greater portion of the existing sales tax to transportation.
In addition, the package includes revenue Virginia could generate if Congress passes legislation enabling states to compel online retailers to collect sales taxes. If Congress does not act by 2015, the wholesale tax on gas would increase to 5.1 percent.
The plan would pump more than $880 million into the state’s transportation programs by 2018 and gradually eliminate the need to transfer highway construction funds to cover maintenance needs. It allows for regional transportation tax increases in the congested regions of Northern Virginia and Hampton Roads. And it creates a dedicated source for rail funding, which could speed the extension of Amtrak service to Roanoke.
To get the deal, McDonnell and the General Assembly had to break through the political gridlock that had stymied previous efforts to solve the state’s chronic transportation funding problems. Business and community organizations throughout the state endorsed McDonnell’s plan and urged lawmakers to act, arguing that aging and overburdened infrastructure could choke Virginia’s economy.
The House passed the compromise on Friday, even though GOP delegates were deeply divided on the issue. Anti-tax activists opposed the legislation and Attorney General Ken Cuccinelli, the GOP’s likely gubernatorial nominee, panned it as a “massive tax increase.”
The last roadblock to a deal wasn’t removed until Saturday. An eleventh-hour opinion from Cuccinelli threatened to upset a fragile compromise on expanding Medicaid, which was critical to getting Senate Democrats to back the transportation bill. House and Senate budget negotiators consulted with McDonnell’s office on the issue today before making a minor change to the Medicaid provision, allowing the transportation vote to proceed.
In the Senate, 17 Democrats and eight Republicans delivered the votes to pass the bill after a floor debate Saturday afternoon. Democrats John Edwards of Roanoke and Phillip Puckett of Russell County were among those voting for the bill, while Republicans Ralph Smith of Bedford County, Bill Stanley of Franklin County and Steve Newman of Lynchburg voted against it.
“I think our potential for economic development in the future is critically involved in the passage of this legislation and what it will bring us,” said Sen. John Watkins, R-Powhatan, who helped negotiate the compromise.
Senate Democratic Leader Richard Saslaw, D-Fairfax County, said of the finished product, “By and large, it’s a pretty good bill.”
“We’ve tried for about 27 years to find some contractors around the state who would pour that cement for free, and we’ve been unable to find anyone and no one’s come forward and offered to do it,” Saslaw said. “There’s no way we can do this without revenue.”
Smith said he had been “bombarded” with calls from lobbyists urging him to vote for the bill.
But, he added, “I have been bombarded by hard-working citizens of Southwest Virginia who took it on their own to address this issue in a time when their dollar is not going as far as it once did, in a time when unemployment is higher than we would like it to be. The General Assembly is saying, ‘Well, you make out the best way you can, but we’re going to take a bigger chunk of your wages in multiple ways.’ ”
Newman sponsored the original version of McDonnell’s bill, but did not support the compromise.
“I told the people of Central Virginia and Southwest Virginia that I would support a transportation package for the first time, but it would have to be revenue neutral,” Newman said.