Va. Senate Finance Committee passes compromise transportation bill

Correction: A previous version of this story incorrectly stated that the sales tax feature of the Senate transportation plan would bring in the most revenue. The proposed 5-cent increase in the fuels tax would in fact generate the most revenue. This version has been corrected.


“We are on the brink of success,” Virginia Gov. Robert McDonnell said, though he added that the plan does not do enough to tap general fund revenue. (Steve Helber/AP)

The truest sign that Virginia lawmakers might be closer to a possible compromise on Gov. Robert F. McDonnell’s $3.1 billion transportation initiative could be that almost everybody found something distasteful in the proposal that emerged Tuesday from a key Senate panel.

The measure approved by a 9 to 6 vote in the Senate Finance Committee would increase the gas tax — instead of eliminating it, as the governor had planned — and use more general fund sales tax revenue to eventually raise $900 million a year.

Sen. Frank W. Wagner (R-Virginia Beach), who helped draft the amended plan, said the latest attempt at a compromise would boost the tax on gas and diesel fuel to 22.5 cents per gallon, a 5-cent increase on a levy that has not changed since 1987.

But it also would increase by half a percentage point the portion of sales tax revenue that goes toward transportation — thereby using more of the general fund revenue for the state’s transportation network.

To address long-standing demands from the urbanized arc running from Northern Virginia through central Virginia to Hampton Roads, the bill would give certain local jurisdictions the authority to impose a local sales tax of up to 1 percent.

The legislation also would impose a statewide 1 percent sales tax on wholesale fuels and allow the state to raise that sales tax by 1 percent if Congress does not pass legislation that would allow Virginia to collect taxes on Internet sales. And it would increase the car registration fee by $15.

“We are on the brink of success,” McDonnell said in a statement, although he added that the Senate plan would not do enough to use existing general fund revenue and sounded wary of its bite on consumers.

Currently, half a cent of the state’s sales tax goes to transportation. The measure passed by the Senate Finance Committee would increase that by 0.05 percentage point, thereby contributing more than $44 million to rail and mass transit by 2014. By comparison, the largest single statewide revenue raiser in the package comes from raising the fuels tax by 5 cents per gallon and indexing it for inflation. That will bring in about $254 million a year beginning in 2014, rising to more than $448 million by 2018.

The committee’s bill would link the tax to the Producer Price Index so revenue kept pace with inflation.

“I think it has a lot of important building blocks,” said Robert Chase, president of the Northern Virginia Transportation Alliance.

“It provides a lot of money but also provides a lot of growth elements.”

The bill adopted Tuesday contains items that neither party likes. Democrats have resisted using additional general fund revenue — which also pays for schools, public safety and other programs — for transportation. Republicans have resisted raising additional taxes.

“When the bill is getting fatter with bigger tax increases, it’s moving in the wrong direction for House conservatives,” said Del. Ben L. Cline (R-Rockbridge), co-chairman of the Conservative Caucus.

Del. Jennifer L. McClellan (D-Richmond) said she was uncomfortable with diverting more general revenue to roads when the state has not been able to restore cuts to education and other services.

“If they had raised the sales tax and then that new portion was dedicated to statewide rail and transit, that would have been more palatable to me,” she said.

“[But] I guess that’s the art of compromise.”

Besides raising familiar tensions between Republicans and Democrats over whether to raise taxes or by how much, the bill fanned the embers of the Senate’s now-defunct redistricting plan.

But this time, the public was treated to a display of fraternal conflict in the Republican Party created by a procedural ruling last week by House Speaker William J. Howell (R-Stafford) that killed the Senate Republicans’ surprise redistricting plan.

When Del. S. Chris Jones (R-Suffolk) stepped to the Senate Finance Committee’s lectern to speak in favor of the bill on Tuesday, Republicans — egged on by Sen. Thomas K. Norment Jr. (R-James City) — demanded that Howell, as the House bill’s sponsor, appear in person to explain it.

Jones sighed, his eyes darting toward the ceiling, and fidgeted as Republicans tabled the measure until the speaker could be summoned.

“I know what’s going on here,” Jones said.

He asked whether senators were prepared to tell constituents that a transportation initiative had failed because its patron sent a surrogate to the committee to speak for it, a common practice here.

“I really don’t need a demagoguery lecture on how things are handled,” Norment shot back, and the two sniped at each other over which chamber upset the rules of decorum.

The measure will head to the Senate floor. Sen. Richard L. Saslaw (D-Fairfax) predicted that the bill would pass and move to a conference committee, where lawmakers from both parties could try to hash out a deal.

Errin Haines contributed to this report.

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