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Saturday, January 21, 2006

Kaine unveils road map

The plan relies on higher sales tax on vehicles and "abusive" driver fees.

RICHMOND -- Gov. Tim Kaine will seek higher taxes on vehicle purchases and automobile insurance premiums and steep fines for driving violations to generate revenue for a transportation funding package that would produce $3.7 billion in its first four years and provide a sustained source of money for road and transit projects.

Kaine announced details of his much-anticipated transportation plan Friday afternoon, hours after a bipartisan group of state senators advanced a multifaceted plan to generate $4 billion over four years. The new Democratic governor and key members of the Republican-run Senate both called for tax increases as part of their prescription for Virginia's transportation funding problems, pitting them against a House of Delegates controlled by a tax-resistant GOP majority.

"We need to make a significant investment in transportation," Kaine said in a Friday afternoon press conference crowded with reporters and lobbyists.

Kaine's proposal -- the most comprehensive plan advanced by a Virginia governor in 20 years -- would increase state spending for urban, primary and secondary road projects by 90 percent and double spending for mass transit projects. He is coupling his funding package with legislation to strengthen local governments' ability to restrict growth in areas with inadequate transportation infrastructure.

Kaine, who took office Jan. 14, said he is not wedded to every detail of his plan. But he insisted he will demand meaningful action on what he called "the signature issue in the 2006 legislative session."

A 2005 state study concluded that Virginia's highway system alone will require additional annual spending of $925 million to match federal funding and sustain the state's road construction fund. Without new revenue, maintenance costs would consume all of the state's highway construction fund within the next two decades, the study concluded.

"Every legislator understands this problem," Kaine said. "They've lived it, they've talked about it, they've heard about it from their constituents. And they are here now for 60 days with every tool at their disposal to solve it."

Sen. John Chichester, R-Northumberland County, sounded a similar note when presenting a plan that would increase the sales tax on automobiles, phase in a 5 percent sales tax on wholesale gasoline and increase vehicle registration fees, among other things.

"Virginia's transportation system has moved from life support to code red," said Chichester, the chairman of the budget-writing Senate Finance Committee.

Kaine and Senate leaders said they would oppose efforts to tap the state's general operating fund as a long-term source of transportation revenue, saying it would drain money from education, health care and public safety programs.

The Senate plan also increases legislative oversight of the Virginia Department of Transportation and allows for voluntary transfers of development rights to encourage growth in areas with adequate infrastructure.

"This is nothing short of a remake of our transportation system," said Sen. Charles Hawkins, R-Chatham, who chaired a Senate task force that spent months studying the state's complex transportation problems.

House Republican leaders said they want to make progress on transportation, but predicted that proposed tax increases will fall flat in their chamber. House GOP leaders will introduce their plan next week.

"Right now, there's just disappointment, " said House Majority Leader Morgan Griffith, R-Salem, after leaving a Friday afternoon meeting in which Kaine briefed House GOP leaders on his plan.

"We indicated we were going to disagree and he wasn't shocked," Griffith said.

Kaine's plan would generate more than $1.5 billion in new highway construction funds over four years, allowing the state to erase mounting maintenance deficits. It also includes $587 million in new money for mass transit and $339 million to match federal funding for specific highway and rail projects.

Under the governor's plan, the sales tax on a $20,000 vehicle would increase by $400; the average auto insurance premium would increase by $18; and vehicle registration fees would increase as much as $13. Kaine said each revenue source is an appropriate one to tap, because each has a nexus to transportation.

But Don Hall, the president and chief executive of the Virginia Automobile Dealers Association, vowed to fight efforts by Kaine and the Senate to increase the sales tax on cars.

"Certainly as an industry we're concerned about a 66 percent tax increase," Hall said. "That is a massive tax increase on the citizens of the commonwealth who buy new and used cars."

Kaine also proposed new "abusive" driver fees that would range from an additional $20 fine for speeding to $2,200 for drunken driving. Drivers with eight or more demerit points on their license would pay annual fees ranging from $250 to $450.

Kaine also repeated his demand that dedicated transportation dollars be protected from transfers to other programs. The governor said he would amend any new transportation tax measures to ensure that revenue expires if lawmakers divert money from the transportation trust fund. Kaine ultimately wants a state constitutional amendment that would prohibit raids on road-building dollars.

Kaine said his stance is consistent with his campaign pledge to reject tax increases without a guaranteed protection of existing transportation dollars. Some Republicans took a different view Friday.

"It only took a week for him to break his promise," said Del. Terry Kilgore, R-Scott County, the twin brother of Kaine's 2005 Republican opponent, Jerry Kilgore.

Staff writer Mason Adams contributed to this report.

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