Northern Virginia GOP legislators support bonds for transportation

| 9/15/2004

A group of Republican state lawmakers from northern Virginia touted a plan Wednesday, Sept. 13, to use the state’s budget surplus to produce $5 billion over 20 years for road and rail projects.

The lawmakers said at a press conference in Vienna, VA, they expect at least a $700 million surplus in the next two years, and they want to lay claim to the money for badly needed transportation projects.

Their proposal also is intended as a pre-emptive strike against leading Democrats who support a fuel tax increase to fund new projects.

“People will be lined up to divvy up that $700 million,” Delegate Tim Hugo, R-Fairfax, told The Associated Press. “Under this plan, we’re saying that the $700 million is going to be dedicated to transportation.”

In reality, the $5 billion in transportation projects would be funded by dedicating the state’s tax on insurance premiums to road and rail work and borrowing against the stream of revenue. The surplus would be used to restock the general fund for the lost insurance taxes.

Delegate Vincent Callahan, R-Fairfax, said using the surplus to issue bonds and borrow is a better option than hiking fuel taxes, because the bonds would give the state $5 billion almost immediately to jumpstart stalled projects. A fuel tax, however, is expected to raise only $45 million for each penny increase, meaning a 10-cent or 20-cent boost would be needed to provide any significant funds.

“And it’s just not in the cards to raise it 10 cents, 20 cents,” Callahan said.