“Virginia is going in the opposite direction of every other state with a Republican governor,” Norquist said in an interview Friday. “We’ve been sharing that with as many people as possible.”
McDonnell says his plan will bring in $845 million a year by fiscal 2018, short of the $1 billion a year many transportation advocates are calling for. He is counting on federal legislation to deliver $250 million of that, betting on a bill — long stalled in Congress — that would give states the authority to make online retailers collect sales taxes.
An additional $283 million a year would come from taking a greater share of general-fund revenue for transportation, which the Senate shot down last year on grounds that it would cheat education and other “core” government services.
The part of McDonnell’s plan that gets the most attention would eliminate the state’s 17.5 cent-per-gallon tax on gasoline, which brings in about $680 million a year, and increasing the sales tax from 5 percent to 5.8 percent. If it passes, Virginia will become the first state to drop the gas tax, a source of revenue states have relied on for decades to fund transportation projects.
The governor describes that aspect of the plan as essentially “revenue-neutral” in the first year, although the sales tax increase would generate about $25 million more than the gas tax would. But by 2018, the sales-tax increase is projected to bring in about $180 million more a year than the gas tax would, with the difference attributed to anticipated economic growth.
McDonnell and some supporters have cast the proposal as “conservative” because the growth in revenue would come mostly from an expanding economy, not an increase in tax rates. Other revenue would come from increasing motor vehicle registration fees by $15 a year and imposing a $100-a-year fee on hybrid and alternative-fuel vehicles.
Since announcing his plan, McDonnell has met with Democrats and Republicans and pitched his proposal on cable TV. His top aides have also reached out to legislators, bearing binders crammed with all the details.
“Whatever we can do is what we’re doing,” McDonnell spokesman Tucker Martin said.
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