Gas Companies Face Surcharge In Senate Plan

Oil Giants Accused of 'Profiteering'

State Sen. John H. Chichester (R-Northumberland), left, and Majority Leader Walter A. Stosch (R-Henrico) attend a finance panel meeting. The surcharge on gasoline companies is aimed at "profiteering," Stosch said. (Photos By Steve Helber -- Associated Press)

RICHMOND, April 27 -- The Virginia Senate passed a new transportation plan Thursday but refused to abandon its months-long support for a new gas tax despite rising prices at the pump.

The senators' proposal includes a surcharge of 6 cents a gallon on gasoline companies, which they characterized as a populist effort to make big oil corporations share the cost of improving state roads and transit systems. Exxon Mobil, which has offices in Fairfax County, announced first-quarter profits of $8.4 billion even as senators voted on their bill.

Gas companies "don't mind sticking it to me and sticking it to every person in Virginia when we come up to that pump, and I don't mind repaying the favor," said Sen. R. Edward Houck (D-Spotsylvania). Majority Leader Walter A. Stosch (R-Henrico) said the tax is aimed directly at "profiteering" by the gasoline giants.

Members of the House, who oppose new taxes to finance transportation improvements, said drivers would suffer the consequences if the Senate plan were adopted with even higher fuel costs. House Speaker William J. Howell (R-Stafford) called the proposal "the silliest thing in the world." The state's sales tax on gas is currently 17.5 cents a gallon.

The Republican-led Senate and House have been locked in a fight over how much to spend on transportation since adjourning their legislative session with no budget March 11. A key part of the dispute has been the Senate's insistence on new gas taxes.

In January, senators proposed a 5 percent tax on wholesale gas. Last month, they passed a state budget that included the 6-cent-a-gallon fee on the terminals where tanker trucks fill up on the way to gas stations.

But as gas has risen above $3 a gallon in some areas, senators have been under increasing political pressure to drop any additional taxes on gasoline. On Tuesday, Gov. Timothy M. Kaine (D) angered his allies in the Senate by saying that he believed that a tax on gas was not the way to solve the dispute between the Senate and House.

"The right way to solve this problem is to do it without a gas tax," the governor said on Washington Post Radio.

But senators rejected a proposal to replace gasoline taxes with a statewide sales tax increase. After a full day of negotiations, a majority of senators of both parties stuck by the terminal fee, including it in a new bill that would also increase ticket fines for reckless drivers and raise the sales tax on cars from 3 percent to 3.75 percent.

The Senate also passed three other bills to allow local governments to raise taxes for regional transportation projects, including one that would give Northern Virginia wide new powers to raise money for local needs.

All told, the Senate bills would raise almost $750 million a year for transportation across the state and as much as $388 million each year for Metro, Virginia Railway Express and new roads in Northern Virginia.

Local governments in the Washington area would be allowed to add a half-cent to the sales tax and raise car registration fees and the tax on home sales.