Taken as a whole, this would be the first significant and sustainable transportation revenue in the commonwealth since 1986 — a desperately needed infusion postponed for too long. And like many compromises, it will be a bitter pill for both parties.
Democrats, particularly in the state Senate, will be offended that nearly $200 million of the new annual money, almost a quarter of the package, would be cannibalized from existing public services — although there would be a backstop to protect school funding. Still, they should find that preferable to Mr. McDonnell’s own plan, which would have shifted $283 million of existing revenue to transportation, with no shield for schools.
Even more Republicans, particularly in the House of Delegates, will choke on the tax increases and user-fee hikes that are at the core of the compromise. Those include a 6 percent hike in the state’s sales tax, which will raise $1.5 billion over five years, and a sharply higher titling tax on the sale of vehicles, which would generate $1.2 billion in the same period.
The flat 17.5-cent-per-gallon tax on gasoline, unchanged for a quarter-century, would be scrapped in favor of a wholesale tax on gasoline (3.5 percent) and diesel fuel (6 percent, hitting tractor-trailers for the heavy toll they inflict on the roads). That’s a smarter plan than Mr. McDonnell’s, which would have eliminated gas-specific taxes altogether.
In the short term, at least, the wholesale gas tax would yield less than the current per-gallon tax. But the move represents progress, for two reasons: First, the wholesale rate would be raised automatically if Congress fails to allow states to collect a sales tax on Internet purchases by 2015, most of which Virginia would devote to transportation. Second, it would track inflation over time in the price of gas, which the current levy does not.
Critics will argue that the plan would produce less money than is needed. Nonetheless, it would mean huge progress in a state that has fumbled to find a way to provide new sources of transportation revenue. As things stand now, Virginia will have not a dime for new projects in 2017. This proposal is the best and most plausible one that has emerged in Richmond to fix that gaping problem. Mr. McDonnell and Democratic leaders must see that it is enacted.