Unraveling of Compromise Plan Feared
By Michael D. Shear
Washington Post Staff Writer
Tuesday, January 30, 2007
RICHMOND, Jan. 29 -- A bipartisan group of senior state senators intends to offer legislation this week that would rely on a sales tax on gasoline to finance billions of dollars for road construction and maintenance, according to a draft of the plan, which will be presented as an alternative to a precarious compromise proposal for transportation funding.
Under the new proposal, to be offered in the Senate Finance Committee, motorists would pay a 5 percent sales tax in addition to Virginia's gas tax of 17.5 cents per gallon, said sources on the committee who spoke on condition of anonymity because the plan has not been presented formally. That would amount to an extra $1.25 for every $25 in gasoline and would raise about $600 million every year.
The idea has the potential to unravel the compromise transportation deal between Republicans in the Senate and House of Delegates that was negotiated earlier this month, legislators said. Lawmakers who were part of that deal said Monday that increasing taxes on gasoline is politically impossible this year.
"That would kill the deal," said Sen. Kenneth W. Stolle (R-Virginia Beach). "It's counterproductive and idiotic. It's the same as doing nothing. As sure as I'm standing here today, that bill will be dead on arrival in the House."
Del. Clarke N. Hogan (R-Charlotte) said his colleagues in the House strongly oppose higher taxes on gasoline.
"That's just a gas tax by another name," Hogan said. "It's one of the least reliable sources of revenue in the last 20 years."
The GOP plan that Stolle helped negotiate includes a provision that shifts about $250 million every year from state programs such as health care and education to transportation. Some senators, including Finance Committee Chairman John H. Chichester (R-Northumberland), say the provision would rob state programs of needed funds.
The tax on gasoline is intended to provide money to relieve congestion across the commonwealth without taking money from other state programs, said Sen. Richard L. Saslaw (D-Fairfax).
"I want [millions] coming out of the general fund every two years so we can say we did something?" Saslaw asked sarcastically.
Sources familiar with the bipartisan plan, which was presented behind closed doors to Senate Democrats on Monday, said adding the sales tax to gasoline is the centerpiece of broader efforts to pump new money into the road and transit network.
The proposal also envisions borrowing up to $2 billion for transportation and imposing new fees on auto registration, diesel fuels and very bad drivers. The bipartisan plan would also allow Northern Virginia and Hampton Roads to raise taxes and fees for costly projects in their regions. The GOP compromise plan also has those provisions.
Kevin Hall, a spokesman for Gov. Timothy M. Kaine (D), declined to comment on the proposals Monday, saying the administration would wait to see what is said at the committee Tuesday.
"A lot of people are working hard and in good faith to come up with a responsible solution to our statewide transportation challenges," Hall said. "The discussion is not helped by swinging at every pitch thrown during the legislative process, so we will withhold comment until we learn more about this proposal."
Many of the features of the new proposal are similar to the GOP plan negotiated this month, after a year of deadlock between the House and Senate.
Efforts to impose new taxes on gasoline suggest that the Senate is fiercely divided over how best to finance road improvements. Several of the Senate's leading Republicans, including Stolle, are expected to oppose the idea of increasing taxes on gasoline.
But some senators, who had expressed support for the earlier deal negotiated by Republicans, said they might support the gasoline taxes when the committee meets.
"I've always felt that gasoline taxes and sales taxes were the best approach to it," said Sen. Frederick M. Quayle (R-Chesapeake), one of the wavering senators. "That puts the burden where it should be."
Gasoline has been exempt from the sales tax in Virginia for years, with a per-gallon tax imposed instead. Only about 10 states impose a sales tax on gas; Maryland and the District do not. Virginia's 17.5-cent gas tax is less than the national average of about 20 cents per gallon.
Saslaw said the idea of taxing gasoline more heavily would allow the state to get money from out-of-state motorists and truckers who drive on the roads but do not pay local or state taxes. He said 40 percent of Virginia's interstate traffic is made up of people who do not live in the state.
"They want to take the money from the schools, the state police and higher ed to pay for it, all to avoid charging anyone from out of state," Saslaw said of his colleagues who oppose higher gasoline taxes. "They want to live with that; that's fine. But that's not a solution."
Stolle said he does not disagree with that logic. But he said pursuing a tax on gasoline is not practical in the current political setting.
"We did that last year, and we got stuck for 10 months and nothing happened for transportation," Stolle said. "It's time to work on a compromise."
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