Panel Orders Localities to Stop Collecting Taxes, Fees

RICHMOND, March 3 -- The Northern Virginia Transportation Authority ordered the state and local governments Monday night to stop collecting taxes and fees that the Virginia Supreme Court ruled are unconstitutional.

The authority, which had been administering the taxes and fees since Jan. 1 on such things as auto repairs and car rentals, issued the order after a day of confusion over whether local governments should stop collecting them.

On Friday, the court said that regional taxing authorities created by the General Assembly last year violated the state constitution because voters do not elect the panel members. But until Monday afternoon, some local governments were still collecting the fees because they had not received official word about the court's decision.

"The Northern Virginia Transportation Authority is developing a refund plan for the special taxes and fees that have been paid to date," the panel said in a statement ordering the cessation of fees. "This is very complex, involving state and local authorities as well as various business entities."

The authority said "potential applicants for refund should retain evidence of payment as it may be required as proof of payment."

The authority's order came too late for an Arlington resident.

"The Supreme Court ruling said what they are doing is illegal -- 'Don't take my money,' " said Stephen Schwartz, 29, who paid a $1,600 grantors tax Monday on the sale of his South Arlington house. "I am a young guy. This is real money we are talking about."

Earlier Monday, Gov. Timothy M. Kaine (D) said he wanted to salvage the regional taxing authorities to pay for new roads and secure several hundred million dollars in statewide revenue for highway maintenance.

Lawmakers have until Saturday's planned adjournment to attempt to find a solution, or they will return this spring for a special session.

A year ago, lawmakers believed they had tackled Virginia's transportation problems by devising a plan to raise $1.1 billion a year for road and transit projects, the largest such infusion in 21 years. But now, in addition to dropping abusive-driver fees and coping with a court decision nullifying the legislation, the Virginia Department of Transportation is telling local governments they will lose millions of dollars for highway construction next year because of the slowdown in the economy.

The budget cuts, including a 47 percent reduction for primary and secondary road construction, are on top of the $300 million a year for Northern Virginia projects that are threatened by the Supreme Court decision.

"If commuters think things are bad now, they are only going to get worse," said Kala Quintana, spokeswoman for the Northern Virginia Transportation Authority.