Va. Leaders Push Increase In Taxes, Fees To Aid Roads

Don Hall, the chief lobbyist for the auto dealers association, said the proposals to increase the sales tax on cars would devastate the auto industry in Virginia.

"We are the golden goose," Hall said, referring to the $600 million that is collected from sales tax on cars. "They are about to kill it. They will put us in a tailspin."

Del. David B. Albo (R-Fairfax) said the Senate's proposal to increase taxes on gas "has a millisecond of life on the House side."

And Del. William R. Janis (R-Goochland) said Kaine misled voters last year. "Eight weeks ago, he was maintaining that he wasn't interested in raising taxes on cars or gasoline or anything else, for that matter."

Republican leaders in the House said they will present their transportation proposal -- without tax increases -- next week. One senior Republican has proposed taking more than $1 billion a year from the state's operating fund to pay for transportation projects, an idea that Kaine specifically rejected Friday afternoon.

The Kaine and Senate plans represent the second major effort to increase taxes in two years. In 2004, the House and Senate argued for more than two months over tax increases to pay for schools, colleges, health care and public safety.

That ended with a compromise brokered by then-Gov. Mark R. Warner (D) and 17 Republican delegates, who agreed to more modest tax increases than the Senate had proposed. Part of the compromise involved dropping Senate plans to raise taxes for transportation.

Kaine's plan would increase the sales tax on the purchase of a car from 3 percent to 5 percent, raising the tax on a $20,000 auto from $600 to $1,000. Taxes on auto insurance premiums would double, adding as much as $18 per year. Auto registration would go up, and fines for bad driving would escalate sharply.

Driving with a suspended license or reckless driving would be assessed an extra $750, and a DUI conviction would be penalized with an additional $2,200 on top of fines and court costs.

In the Senate plan, sales taxes on cars and wholesale gasoline would be imposed gradually, increasing to 5 percent. Senators said that by 2010, the average driver could pay $65 more each year for gas.

The costs of registering an automobile and renting a car would also increase under the Senate plan.

It would require a new review of procedures at the Virginia Department of Transportation and give local governments more tools to direct growth.