By Tim Craig and Anita Kumar
Washington Post Staff Writers
Tuesday, May 13, 2008

RICHMOND, May 12 -- Virginia Gov. Timothy M. Kaine proposed Monday raising $1.1 billion in taxes and fees to build and repair roads, including boosting the sales tax by 1 cent in Northern Virginia and Hampton Roads.

Kaine (D) also recommended a statewide $10 increase in annual vehicle registration fees and a 1 percent rise in the sales tax on new car sales. Kaine has been trying to raise the so-called car titling tax since he took office in 2006. That tax is now 3 percent; the sales tax is 5 percent.

Kaine's proposal -- which GOP leaders predicted would not reach the House floor -- marks the fourth time since he was elected that he or the General Assembly has tried to tackle the state's transportation needs. Lawmakers approved a record transportation financing package last year, but the state Supreme Court invalidated a key part of it in February that included $400 million a year for Northern Virginia.

The governor has called a special session next month for the General Assembly to consider his proposal, and he warned Monday that failure was not an option this time because Virginia's economic vitality is at risk.

"The General Assembly needs to act because its reputation is at stake, and the reputation of our state is at stake," said Kaine, standing in front of several charts that he said supported his contention that the state could soon run out of money to build roads.

But Kaine's latest effort appears to be doomed. House Republicans said Monday the governor's $1.1 billion plan has virtually no chance of passing their chamber, and some Senate Democrats vowed to rewrite it to include an increase in the state's gasoline tax.

Del. David B. Albo, a Fairfax Republican involved in transportation negotiations, said Kaine's plan had a "0.000 percent chance" of winning approval.

The money raised statewide from Kaine's proposal would go toward erasing, over the next six years, a projected multimillion-dollar shortfall in the part of the transportation budget that covers patching potholes, repairing bridges and otherwise maintaining roads.

Kaine's plan to increase the sales tax from 5 cents to 6 cents a dollar in Northern Virginia and Hampton Roads would not apply to food and medicine.

The increase, which would replace a series of regional taxes and fees that the Supreme Court ruled unconstitutional, would eventually generate about $675 million for construction projects in those two regions, Kaine said.

In Northern Virginia, the plan would result in $50 million in annual funds for Metro and $25 million for Virginia Railway Express. It would also expedite construction of several major highway projects, including improvements to Route 28 in Loudoun County and Route 7 in Fairfax County.

In addition to those funds, Kaine is proposing a statewide 25-cent increase in the grantors tax, which is now 10 cents per $100 of assessed value, that sellers pay on the sale of a home. The money, about $155 million annually, would be used to further invest in mass transit and rail.

"This plan will improve safety, it will provide relief to the two most congested parts of Virginia and it will provide a change in choices for commuters," Kaine said.

Minutes after Kaine unveiled his proposal, House Majority Leader H. Morgan Griffith (R-Salem) and Minority Whip M. Kirkland Cox (R-Colonial Heights) predicted it would not reach the House floor.

"I don't see anything positive in the governor's plan that makes it something that's likely to be considered," Cox said. "It's all tax, tax and more tax."

Democrats, who hold the majority in the Senate, praised Kaine for trying to respond to the state's needs but added that they will probably change it. Some Senate Democrats back a gas tax increase, but Kaine said he did not include it because of the record price of fuel.

Senate Majority Leader Richard L. Saslaw (D-Fairfax) said Kaine's proposal doesn't do enough to hit out-of-state motorists for some of the costs of maintaining Virginia's highway system. Saslaw, who plans to meet with Senate Democratic and Republican leaders in the coming weeks to try to develop their own plan, lashed out at House Republicans over their refusal to consider a statewide tax increase.

"If . . . that crowd just wants to stick their heads into the sand and pretend we don't have a problem and run this state into the ground, I can't physically force them to do this," Saslaw said.

A year ago, Virginia's transportation funding problem appeared to have been resolved. But lawmakers were forced to repeal steep abusive-driver fees because they failed to gauge the negative reaction from drivers and the court system. Then came the Supreme Court decision that said the regional taxing authorities created by lawmakers in Northern Virginia and Hampton Roads were unconstitutional because they gave taxing powers to unelected panels.

House Republicans said they want to salvage last year's deal by having local governments, not the taxing authorities, vote to impose the new taxes. Kaine and Democrats are instead pushing for a broader plan that also closes the estimated $375 million deficit in the part of the budget used to maintain roads.