Gas Companies Face Surcharge In Senate Plan
Oil Giants Accused of 'Profiteering'

By Rosalind S. Helderman and Michael D. Shear
Washington Post Staff Writers
Friday, April 28, 2006

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.

"Let me tell you, if we do nothing . . . we're about four or five years away from where you're going to need an appointment to get on the Beltway in Northern Virginia," said Sen. Richard L. Saslaw (D-Fairfax).

Delegates have complained that senators have held up a resolution to the stalemate by embedding their transportation tax increases in their $72 billion budget document, which also funds schools and public safety and health.

With the bills passed Thursday, senators said they had responded to the criticism by approving separate legislation on transportation. They challenged delegates to accept the bills or offer alternatives to infuse new cash into traffic-clogged roads if they dislike the Senate's.

"We all love to talk . . . but we only act by passing legislation," said Sen. Kenneth W. Stolle (R-Virginia Beach). "Talk's cheap. I would encourage the House of Delegates and the governor to stop talking about transportation and start acting to solve transportation."

Delacey Skinner, Kaine's communications director, called the Senate action "a strong move towards reaching a solution."

"It's about time to reach a conclusion on this," she said. "We're very encouraged by what the Senate did today."

But delegates reiterated calls to first agree on spending in other areas, ensuring that a budget is written before the new fiscal year begins July 1. Then, delegates reasoned, the chambers could return to Richmond to talk about transportation.

"What's important is that we get a budget out so law enforcement, education know there's money there to run their programs," said House Majority Leader H. Morgan Griffith (R-Salem).

"My guess is [the bills] won't be received well," he said.