A group of Republican legislators from Northern Virginia announced a plan yesterday to borrow billions to finance roads and rail in the state, the first such proposal for a 2005 General Assembly session that lawmakers say will be dominated by efforts to raise money for transportation.
Backers said they released their plan yesterday, a full four months before the legislature meets, because they wanted to lay claim to what they say will be a $700 million budget surplus and to build momentum behind their idea.
"Taxpayers will enjoy a $700 million surplus," said Del. David B. Albo (Fairfax), one of the architects of the plan. "We want to make sure that money goes to transportation."
The proposal outlined yesterday probably will be joined by several others before lawmakers meet in January. Senate Finance Committee Chairman John H. Chichester (R-Stafford) has promised a proposal, and House Speaker William J. Howell (R-Stafford) has appointed a committee of GOP delegates to come up with ideas. Gov. Mark R. Warner (D) has said he is working to come up with a plan, while leading Democrats support raising gas taxes and fees to fund new projects.
Environmental leaders will have a conference Saturday to talk about their approach to solving transportation problems, with an eye toward the General Assembly session. "What we'd like them to do is have a more principled approach toward identification of priorities and to be focused on developing meaningful measures of performance," rather than just searching for new revenue, said Chris Miller, president of the Piedmont Environmental Council.
In recent years, lawmakers have addressed deficiencies in every major state function other than transportation. In the spring, state leaders raised sales taxes and other taxes by $1.5 billion to increase funding for schools, public safety and health care.
Meanwhile, the state's transportation budget has diminished, and planned projects have been cut. Transportation officials have turned to the private sector and to tolls as ways to fund some projects, but there is widespread agreement among planners and lawmakers that the state's ability to build roads and rail will atrophy unless a lot more money becomes available.
"We've been very generous" to other needs, said Del. L. Scott Lingamfelter (R-Prince William), a supporter of yesterday's plan. "Now it's time to shift our attention. Here's the message: It's now transportation's turn."
Backers said the surplus would allow the state to borrow against the revenue from a tax residents pay on home, life and auto insurance premiums. The tax revenue, which goes to the state's general fund, would be replaced by the surplus.
The announcement at the Tower Club in Tysons Corner, the heart of Northern Virginia's economic community, drew the backing of business leaders and transportation advocates, many of whom were on hand.
"I think it has merit because it's building upon a previously identified revenue source," said William D. Lecos, president and chief executive of the Fairfax County Chamber of Commerce. "It's a good first start." Lecos said the chamber probably would support other proposals as well, including a gas tax increase.
Opponents of the plan said it hinges on the same sort of borrow-now, pay-later mentality that got the state into the fiscal difficulties of the past few years. They said it is unrealistic to count on revenue growth for the next 20 years to fund the plan, and they questioned the $700 million surplus figure. If revenue lagged, the debt for transportation would have to be paid first, leaving whatever is left over for schools, health care, public safety and other needs.
"I don't know what it is about borrowing that excites some of my colleagues," Chichester said. "I think their plan is shortsighted, not well thought out and will guarantee financial chaos and turmoil in the not-too-distant future."
Chichester said he believed that more money is needed, either through additional taxes or fees. "You've got to have a bigger melon," he said. "I don't know how you do it in any other way."
In the last General Assembly session, Chichester proposed raising some taxes and fees to fund transportation projects, but the idea was dropped during a prolonged budget battle. He said he has not decided on a strategy for next year.
Ellen Qualls, Warner's spokeswoman, said the governor welcomes any funding plans but is also concerned about borrowing.
"This proposal would more than double the Commonwealth's tax-supported debt burden," Qualls said in a statement. "That would seriously limit our capacity to build prisons or college buildings, or meet other capital needs in the future, without affecting our AAA bond rating."
Last year, Warner proposed using a portion of the insurance premium tax to pay for transportation projects, but his plan would have paid for projects directly rather than leveraging the funds to borrow more money.
Del. Vincent F. Callahan Jr. (R-Fairfax), chairman of the House Finance Committee and a backer of the plan, said it would not have any "adverse effect" on other state needs.
But other supporters were less sure. "If you do this, some things may wait a year, even two," Lingamfelter said.