By Anita Kumar
Washington Post Staff Writer
Wednesday, February 2, 2011; 11:09 PM
RICHMOND - The Virginia General Assembly is poised to pass Gov. Robert F. McDonnell's most significant legislative accomplishment this session - nearly $3 billion for the state's clogged roads over three years - a goal that seemed unlikely only a few weeks ago.
The proposal, to be taken up Thursday by both the Senate and the House of Delegates, represents the largest infusion of funds into the state's cash-strapped transportation coffers in more than two decades. It would help fund 900 projects, including the widening of Interstate 66 and high-occupancy toll lanes on interstates 95 and 395.
Some Democrats and conservative Republicans have been concerned about the state's rising level of debt, but McDonnell (R) and his team worked for weeks to alleviate fears and have convinced the lawmakers that the spending would not hurt the state's financial standing or its coveted AAA bond rating.
Del. Brenda L. Pogge (R-York), who recently said the state should not be borrowing and spending, said she now will vote for the governor's plan.
"In order to move this transportation issue forward, we have to do something,'' Pogge, one of the House's most conservative members, said. "It's been something we've been looking at and dragging our feet on for a long time."
Senate Majority Leader Richard L. Saslaw (D-Fairfax), one of McDonnell's biggest foes, voted to advance the plan this week at a Finance Committee meeting. Saslaw had said last month that he was worried about changes to the state's debt capacity.
McDonnell had Speaker William J. Howell (R-Stafford), a longtime friend and powerful ally, introduce the bill in the House. The governor also flew to New York with four Republican and Democratic legislators to get assurances from bond-rating agencies that the state was still on firm financial footing. And his secretary of finance, Richard D. Brown, wrote legislators explaining that Virginia's debt is relatively small compared with that of other states.
Virginia is one of 15 states with AAA bond ratings from all three rating agencies and has had a top ranking since the system to calculate the likelihood a state would repay its debt was put in place in 1938. It ranks seventh for the amount of debt - $7 billion for big-ticket projects in mental health, parks and higher education, or $895 for every Virginian.
"No debt is almost as bad as having too much debt,'' said Steve Kantor, managing director of FirstSouthwest, a consultant to the state for seven years. "No debt would mean no growth, no capital improvements, no investments in infrastructure and . . . that would be like saying, 'I'm not going to spend any money on my house this year.' "
For years, Virginia has struggled to allocate funds for transportation, with Democrats and Republicans at odds over whether to increase taxes or use other methods to raise the money. The state's billion-dollar transportation budget shortfall has led to thousands of job cuts and hundreds of projects left unfinished.
McDonnell, who opposes raising taxes, would not have been able to issue new bonds during his term because the state has reached its borrowing limit under a cap instituted 19 years ago. But the Debt Capacity Advisory Committee, made up of legislative and gubernatorial staffers, tweaked the cap in November. Brown said the state now can borrow each year for the next 10 years.
The governor said he wants to issue two sets of bonds for transportation. The debt on $1.8 billion in bonds - about $135 million a year - would be paid back through the state insurance premium tax. The debt on $1.1 billion in bonds - about $80 million a year - would be diverted from the $800 million a year the state receives in federal highway funds. Because interest rates and construction costs are low, the state will save millions, McDonnell said.
The House Appropriations Committee voted for the bill Monday, and the Senate Finance Committee approved its version Tuesday.
Only two members of the Senate panel voted against the proposal. One was the chairwoman of the Senate Democratic Caucus, Sen. Mary Margaret Whipple (D-Arlington), who said she is concerned about the debt and believes insufficient planning has gone into the list of 900 shovel-ready projects.
Seven Senate Democrats supported the bill in the Finance Committee, and three others have indicated they back the concept. In the House, some of the most conservative members have indicated they are behind the bill.
"If it will save the commonwealth some money in the long run, I'll support it,'' Del. Mark L. Cole (R-Fredericksburg) said.
But the bills differ, and a group of House and Senate negotiators will have to hash out a final compromise before the annual legislative session ends late this month.
State officials released a list of 900 transportation projects that could be paid for if the bonds are issued. In Northern Virginia, they include widening Interstate 66 between Gainesville and Haymarket; improving Rolling Road in Fairfax County to address the expected impact of additional jobs at Fort Belvoir; widening Route 7 in Loudoun County; and work on Route 28 in Fairfax and Prince William counties.
A trio of conservation and smart-growth groups - the Coalition for Smarter Growth, the Virginia Chapter of the Sierra Club and the Piedmont Environmental Council - have said the proposal gives the governor too much power to decide how to spend the funds and that he is not planning to allocate enough money on transit projects.
Transportation Secretary Sean T. Connaughton said the plan is not a long-term solution to Virginia's road needs but would provide significant new funding to begin to address the state's backlog. "We will be back next year," he said.
Staff writer Rosalind S. Helderman contributed to this report.