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Virginia House Republicans block Metro tax hikes, which means a bigger drain on funds for roads

A new carpet-less Metro train on Feb. 7. Virginia House Republicans rejected tax hikes for Northern Virginians as part of a funding plan for Metro on April 18.
A new carpet-less Metro train on Feb. 7. Virginia House Republicans rejected tax hikes for Northern Virginians as part of a funding plan for Metro on April 18. (Salwan Georges/The Washington Post)

Virginia House Republicans on Wednesday blocked two tax increases to help fund Metro, leaving a landmark regional funding deal intact, but at a larger cost to road projects in the state’s Washington suburbs.

The action means “high priority projects . . . are less certain of funding simply due to lack of revenue,” said Martin E. Nohe, chairman of the Northern Virginia Transportation Authority.

Such projects could include improvements to Route 28 to ease congestion in Prince William, Fairfax and Loudoun counties; Route 1 in Prince William and Fairfax; Northstar Boulevard in Loudoun; and the West End transitway in Alexandria, said Nohe, who also is a Prince William supervisor (R-Coles).

Gov. Ralph Northam (D) had proposed amending the Metro funding legislation to raise levies on real estate transactions and hotel stays. The tax hikes — which would have fallen only on Northern Virginians — would have raised about $30 million of the $154 million a year that the state has pledged to Metro.

Northam’s goal — endorsed by all the region’s Democrats and some prominent Republicans — was to reduce the drain on funds now earmarked for roads and other transportation priorities in the heavily congested suburbs.

Metro bill’s hidden cost: $100 million a year less to unclog traffic in Northern Virginia

The legislation gets about $100 million for Metro by diverting funds from existing projects, and Northam’s amendments would have trimmed that to $70 million.

The GOP-controlled Senate endorsed the tax hikes by a vote of 26 to 12 Wednesday afternoon, but the amendments died less than an hour later when the House killed them on a straight party line vote of 50 to 48.

The vote was a major victory for Del. Timothy D. Hugo (R-Fairfax), who sponsored the original House bill to raise money for Metro, but said from the start that he wanted to do it without tax increases. His strategy was backed by House Speaker M. Kirkland Cox (R-Colonial Heights).

“From the beginning of this process my position was that any new funding for Metro had to go hand-in-hand with meaningful reforms without raising taxes,” Hugo said.

Cox’s office issued a statement under headline reading, “House of Delegates rejects tax increases for Metro, stands firm behind conservative funding and reform plan.”

About $22 million of Virginia’s funding for Metro comes from an increase in regional wholesale gasoline taxes, but that change was not part of Hugo’s bill.

Local officials of both parties were quick to criticize Hugo for the outcome.

“Looks like Delegate Tim Hugo sold us down the river,” Fairfax Board of Supervisors Chair Sharon Bulova (D) said. “Partisan politics over sound public policy.”

Virginia governor asks legislature to restore two tax increases to fund Metro

Even more scathing was the comment from Loudoun Supervisor Matthew F. Letourneau (R-Dulles).

“Today’s House vote is Exhibit A as to why Republicans keep losing elections in Virginia,” Letourneau said. “The fact that anyone — let alone delegates from Northern Virginia — would vote to reduce funding for roads — the number one issue in the region — when there was a better option on the table is a disgrace.”

Letourneau noted that two conservative state senators from Northern Virginia — Richard H. Black (Loudoun) and Jill Holtzman Vogel (Fauquier) — voted for the tax increases.

Northam said he was “very proud” of the overall accord, which meant Virginia had secured “historic and much-needed funding for the Metro system.”

But he noted that the House action would “potentially divert funding from transportation projects in Northern Virginia.” He said it “could also negatively impact other projects across the Commonwealth, forcing Northern Virginia localities to now compete with other regions for limited transportation dollars.”

Supporters of the proposed tax increases had stressed that they were modest in size. Northam proposed raising the tax on real estate transactions, known as the grantor’s tax, which is usually paid by the seller, by 5 cents per $100 of sales price. That would add $250 to the cost of selling a house worth $500,000.

Breakthrough in Virginia on Metro funding: Lawmakers approve $154 million

The hotel levy, known as the transient occupancy tax, would have risen to 3 percent from 2 percent. That would increase the tax on a $200 hotel bill by $2.

Senate Minority Leader Richard L. Saslaw (D-Fairfax), who was chief sponsor of the Senate version of the bill, called the proposed tax increases “a pittance” but said they would be “a big help” for Metro.

Wednesday’s vote resolved the final outstanding dispute in Virginia over its share of the regional deal to give Metro a total of $500 million a year in dedicated funding.

The Virginia package of $154 million a year will be financed by $30 million of state funds, $22 million from the wholesale gas tax increase, and $102 million diverted from road improvements and other transportation projects.

In Maryland, Gov. Larry Hogan (R) has said he will sign legislation passed by the General Assembly giving Metro his state’s share of the funding — $167 million a year. D.C. Mayor Muriel E. Bowser (D) has signed a bill pledging $178.5 million, although the D.C. Council still has to approve some tax increases to help pay for it.

The three jurisdictions provide different amounts according to a Metro cost-sharing formula based on factors including ridership and the number of Metro stations.