Virginia Legislature Ends Plan to Borrow Transportation Funds for Budget Shortfall

AASHTO Journal, 14 November 2014

At a time when many states are scrambling to find money for transportation upgrades and voters are approving state ballot measures to give road funds special protection, Virginia’s General Assembly has backed away from a plan to shift $50 million in transportation revenue to other budget needs.

Both chambers of the legislature voted Nov. 10 to stop an effort to borrow some transportation funds to help close a yawning $2.4 billion deficit in Virginia’s budget. Their action means lawmakers will have to find money from other government accounts to make up for the amount it would have taken from funds dedicated to roads, transit and commuter rail systems.

Virginia was one of several states whose legislatures during 2013 passed major transportation revenue laws to boost spending on infrastructure and ease congestion. The $1.2 billion Virginia plan had a wide range of revenue-raising pieces; a major one replaced the traditional per-gallon gasoline tax with an upstream sales tax that could rise over time with inflation.

As the Washington Post reported, though, Virginia’s 2013 law included a “kill switch” that would repeal the law if the money was diverted to other budget areas.

After Virginia’s bond counsel and some legislators said tapping the transportation revenue stream to help close the budget gap could endanger the 2013 measure, the Post said Gov. Terry McAuliffe proposed amending the budget to specify that this draw down of transportation money would not trigger the kill switch.

But while that reportedly satisfied the bond counsel, it did not end the criticism of a borrowing plan lawmakers had discussed for months.

On Nov. 4, voters in neighboring Maryland and in Wisconsin embraced amendments to their state constitutions that were designed to help ward off raids of transportation funds for other budget areas. Transportation TV has more on the voter decisions.

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