AASHTO Journal, 29 March 2013
Virginia Gov. Bob McDonnell this week made small changes to the state’s transportation investment package in order to “strengthen” the bill, according to a statement put out by McDonnell Tuesday.
Virginia’s General Assembly passed McDonnell’s transportation measure last month (see related AASHTO Journal story here), which eliminated the state gas tax and replaced it with a 3.5 percent wholesale tax on fuel and a 6 percent tax on diesel fuel. Also included in the deal was a provision to boost the electric car registration fee to $100, which also now applies to hybrid and alternative fuel vehicles. Finally, McDonnell’s plan called for a sales tax increase on nonfood merchandise from 5 percent to 5.3 percent and relied on some general fund revenues, among other small changes. These provisions mean the state could raise more than $860 million per year for transportation projects once the bill is implemented on July 1.
McDonnell revised the plan this week to reduce that fee on alternative fuel vehicles from $100 to $64, stating that the $100 fee proposal was based on a 17.5 cents-per-gallon gas tax. However, since the tax rate of gasoline has been lowered, the amendment drops the registration fee down to $65 to ensure equity among all different types of vehicles. Also reduced in McDonnell’s amendments is the proposed vehicle titling increase. Originally, McDonnell proposed and the General Assembly passed a vehicle titling tax increase of 4.3 percent. The amendment drops that percentage down to 4.15 to help ensure that the number of vehicles purchased by the public wouldn’t drop.
“Virginia’s economy depends on a safe, reliable, efficient transportation system spanning all areas of the Commonwealth,” McDonnell said in a statement. “This is why I have substantially agreed to the provisions in the compromise bill that passed our legislature, but have proposed multiple amendments to limit what it asks Virginians to contribute, to address legal questions regarding the regional taxing authority, and to clarify many administrative and technical aspects of the bill.”
Other changes to the transportation bill include correcting/reducing the rate of taxation for the regional congestion relief fee, reducing the Transient Occupancy Tax in Northern Virginia, addressing the legality of some tax authority issues, and locking in the fact that all transportation dollars gained by this bill are used solely for transportation and not diverted elsewhere.
McDonnell said that with the amendments, Virginia is still on course to raise $5.9 billion in total revenue for transportation during the next five years. Additional information on the bill is available at VARoadToTheFuture.Virginia.gov.