Tax Issue Muddles Outlook on Va. Roads
Consensus Lacking Among Democrats

By Anita Kumar
Washington Post Staff Writer
Friday, April 25, 2008; B01

RICHMOND, April 24 -- The Virginia General Assembly will return to the state Capitol in late June to tackle the state's transportation problems, but deep divides exist between and within political parties over how to fix them.

Republicans are adamantly opposed to any statewide tax increase. Democrats, including Gov. Timothy M. Kaine, want to raise taxes across the state to provide much-needed money for road and transit projects.

But Democratic lawmakers are split over which tax to raise. Many senators favor increasing the gas tax; many delegates prefer increasing the sales tax.

Sen. R. Creigh Deeds (D-Bath) said some senators worry that a sales tax increase would be spent on needs other than transportation. Del. James M. Scott (D-Fairfax) said his colleagues in the House are mindful of recent polls that show Virginians, already struggling with soaring gas prices, don't want to pay more for fuel.

Democrats from both chambers played down their differences and said all statewide options will be considered, including higher taxes on auto sales and titles.

"There needs to be a comprehensive statewide fix to this thing,'' said House Minority Leader Ward L. Armstrong (D-Henry).

The General Assembly passed a landmark transportation package last year designed to pump $1.1 billion a year into transportation throughout Virginia, with an emphasis on the state's two most congested areas. A last-minute change proposed by Kaine allowed regional authorities, not localities, to collect $400 million annually in Northern Virginia and $200 million annually in Hampton Roads.

But in a unanimous decision, the state Supreme Court ruled Feb. 29 that the regional authorities cannot constitutionally levy taxes and fees because they are not elected bodies.

Legislators left town Wednesday after wrapping up other unfinished business, including tweaks to a $77 billion, two-year spending plan. Their focus will now shift to transportation.

A downturn in the economy and soaring asphalt and steel prices have diminished Virginia's ability to pay for transportation improvements. State officials say that there is a shortfall of hundreds of millions of dollars in the part of the budget used to maintain roads and that the fund could be nearly depleted within a decade.

"I think it's a tragedy that the governor has messed this up and is not doing anything to fix the problem," Del. Timothy D. Hugo (R-Fairfax) said. "We're waiting. Governor Kaine needs to get on the stick."

Kaine is expected to introduce a transportation plan before calling the General Assembly back to Richmond for a special session in late June.

"In the coming weeks, I will be meeting with legislators and stakeholders about much-needed funding for transportation,'' Kaine said in a statement. "I look forward to continuing our bipartisan efforts to address our transportation needs."

Kaine has met with leaders of the Republican-controlled House and Democrat-controlled Senate twice since the Supreme Court ruling. Another meeting had been scheduled for Wednesday night but was canceled after legislators worked late into the night haggling over judicial appointments.

House Majority Leader H. Morgan Griffith (R-Salem) said he did not even bother to show up for the second meeting with Kaine and other legislators because Democrats insist on considering only plans that call for statewide tax increases.

"It's dead on arrival. Until that issue is put on the backburner, I don't see us agreeing on anything," he said. "They keep telling people they don't want to raise taxes and then they turn around and raise taxes."

The Senate passed a bill this year that called for a 1-cent increase in the gas tax in each of the next five years. The state gas tax of 17.5 cents a gallon was last raised in 1986.

The House rejected that proposal and quashed any discussion of raising the state sales tax, currently 5 percent. House Republicans prefer to focus on salvaging the regional panels by allowing local governments to enact tax and fee increases.

But Deeds, who is running for the Democratic nomination for governor in 2009, said House Republicans from Northern Virginia and Hampton Roads, who feel immense pressure to find money for their clogged roads, might consider other options. Last month, eight Republican delegates from Hampton Roads announced that they would support a 1-cent regional sales tax increase to pay for road construction.

"We will wait and see," Deeds said.