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Chichester Seeks to Earmark Insurance Tax for Road Projects

$100 Million Fund Has Been Diverted for Other Uses

By Rosalind S. Helderman
Washington Post Staff Writer
Saturday, January 22, 2005; Page B04

RICHMOND, Jan. 21 -- Sen. John H. Chichester, chairman of the Senate's Finance Committee, proposed Friday that Virginia spend about $100 million a year more on transportation, a move the Stafford Republican characterized as the first step toward addressing the state's dire road and transit needs.

His proposal, introduced on the last day members of the General Assembly are allowed to offer new bills, comes several weeks after more comprehensive transportation packages were put forward by Gov. Mark R. Warner (D) and House Speaker William J. Howell (R-Stafford). Lawmakers agreed that the three concepts will form the framework of a discussion about road needs, which will probably be the core policy issue of this year's short legislative session.

Sen. John H. Chichester says his "fire wall" proposal would help state lawmakers avoid a yearly fight over the tax money and build up public trust. (Steve Helber -- AP)

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"It comes down to this: Why apply a Band-Aid to a gaping, open wound, when we all know in our hearts that only a tourniquet will stop the hemorrhaging?" Chichester said in a speech to his colleagues on the Senate floor.

Starting next year, Chichester would create a permanent stream of funds for transportation by using taxes on auto insurance premiums, which he said would total about $106 million a year. The General Assembly passed a law in 2000 shifting those taxes to transportation, but in the lean years since, lawmakers have spent them on public education, health care and other needs instead.

Chichester said that by guaranteeing that the tax money is spent on roads, the state would avoid a yearly fight over it. It would also help establish public faith that money promised to transportation will be spent there, credibility that will be needed to gain support for the far larger infusion he said will soon be necessary to get drivers out of congested traffic.

"It is disingenuous to ask the taxpayers to pay for one thing and then let the funds migrate to something else," said Chichester, Senate president pro tempore.

His proposal would erect a "fire wall," separating the money that feeds the state's transportation fund from the yearly operating budget for other needs and requiring that lawmakers not borrow from one area to pay down the other.

Last year, the House and Senate shelved plans to solve the state's transportation problems as part of a compromise over a tax and spending plan.

This month, Warner suggested spending $824 million on roads, transit and matching funds to encourage public-private partnerships. The vast majority represents one-time-only expenses.

Warner said in an interview that he is "concerned" about the long-term ramifications of Chichester's proposal on the state's budget. But he said that "the notion of putting up a fire wall so it goes both ways makes some sense."

Howell's plan totals $938 million, including about $100 million a year collected by increasing fines for drivers who speed and break other road rules. He would also divert the tax on auto insurance premiums this year to transportation, but he has made no guarantees that he would do so in the future.

Howell said he was not aware of the details of Chichester's proposal. But he disagreed that money for schools, health care and public safety should be shielded from transportation spending.

"The general fund is general. . . . It can be used for anything. To say that we are not going to use it for transportation sometime in the future is, I think, contrary to what we're trying to accomplish," he said.

What the legislature will ultimately do for transportation this year may hinge on whether lawmakers are willing to use some of the $918 million in extra tax money the state will collect this year because of the strong economy. Warner and Howell have proposed doing so, but Chichester said he believes that those funds should be spent elsewhere. Sen. Kenneth W. Stolle (R-Virginia Beach), an ally of Chichester's, said that some senators may be ready to negotiate the point.

Chichester's plan dovetails with a proposal by Sen. Charles R. Hawkins (R-Pittsylvania) to establish a commission to study transportation fixes.

"To get people out of traffic jams, we've just got to debate what we need and where we're going," Hawkins said.

Staff writers Chris L. Jenkins and Michael D. Shear contributed to this report.

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