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Friday, March 09, 2007

Kaine gets feedback on bill

Western Virginia officials do not want to see the general fund depleted to pay for transportation.

Local government officials in Western Virginia don't want to pay for roads and transportation out of the state's general fund, its main pool of revenue from income taxes and similar levies.

The general fund, however, is the primary source of money for roads in Western Virginia under the transportation bill approved by the General Assembly and awaiting action by Gov. Tim Kaine.

Local officials would rather see highways financed by an increase in the gasoline tax, many of them told Kaine in Roanoke on Thursday during the second of three transportation meetings he's holding with local officials around the state.

But the gas tax isn't going to change, Kaine said.

"We have had extensive discussions about that with members of the House of Delegates, and again and again they have said that's their chief non-negotiable, they don't want to touch the gasoline tax," Kaine told reporters after a closed-door meeting with representatives of cities and counties throughout Western Virginia.

Roanoke Mayor Nelson Harris, who was in the meeting, said, "Whether you were from Rockbridge County, Roanoke or Wytheville, everyone was concerned about this depletion of the general fund."

Salem Mayor Howard Packett said the transportation bill's choice to tap the general fund "makes us a little squeamish at the local level."

The general fund is a key source of salaries for teachers and police officers.

Localities, particularly in Western Virginia, rely heavily on the general fund to pay for schools, public safety and health.

Kaine said, "If we get in the habit of taking too much out of the general fund, we are going to hurt the priorities that Virginians demand and expect, and hurt the ability of local officials to deliver programs to their citizens."

Darlene Burcham, Roanoke city manager, said, "If you start that erosion of taking money for transportation, it means less and less for local governments."

With a gas-tax increase off the table and heavy reliance on the general fund in disfavor, a few other options for amending the transportation bill were discussed during the meeting, said Wytheville Mayor Trent Crewe.

Those included increases in titling taxes and insurance fees, Crewe said.

Kaine told reporters he's talking with legislators to find out where tolerance exists for changing the transportation bill's financing sources.

The governor met Wednesday with local officials in Northern Virginia and plans to meet today with representatives of Hampton Roads localities as he seeks to build a consensus on ways to amend the transportation bill that was passed by the General Assembly.

"You'll have to wait and see" what those amendments will look like when he announces them March 26, Kaine said.

But the Western Virginia officials' view of the transportation bill's reliance on the general fund was shared by Kaine.

"Deep hits on the general fund: bad idea," Kaine said.

Also, he said, the transportation bill's concept of using almost $200 million per year of general-fund dollars to pay off bonds issued to finance roads is "fiscally irresponsible."

"If you're going to issue bonds, you ought to take a revenue source and earmark it permanently into a bond repayment fund so there's a long-term stream of income," Kaine said.

Other concerns expressed by local government officials, Kaine said, included the transportation bill's provisions for Western Virginia.

The bonds it proposes to sell are focused on interstate and primary highways. They could not be used to fix urban roads or rural secondary roads.

"There was a strong request from this group to fix that aspect of the bill so the money could be used for rural Virginia," Kaine said.

Also, the formula for distributed bond proceeds heavily favors urban areas and leaves few of the bond proceeds for more rural transportation districts such as the Lynchburg-Danville area and the Culpeper region, Kaine said.

"People said, 'What do we get out of this? In rural Virginia we might get nothing,' " Kaine said. That means the transportation bill needs a fix to answer those concerns, he said.

The Virginia gasoline tax is 17.5 cents per gallon, which is in the bottom 10 among the states, according to the Tax Policy Center.

Staff writers Jeff Sturgeon and Todd Jackson contributed to this report.

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