A first-of-its-kind approach to transportation funding in Virginia has cleared its first hurdle. In addition, a provision was added to back off on plans to toll Interstate 95.
The House Finance Committee voted 14-8 on Wednesday, Jan. 30, to advance Gov. Bob McDonnell’s five-year, $3.1 billion transportation funding plan. Specifically, the bill would increase the state’s general sales tax to help raise more than $600 million annually.
McDonnell said Wednesday’s action is the “first positive step” to enacting a long overdue, long-term transportation funding solution.
“The can has been kicked for too long. ... This first vote clearly demonstrates a growing, and bipartisan, consensus that transportation is a core function of government and our investments in building and maintaining or highways, transit systems and railroads is of utmost importance,” McDonnell said in a press release.
To help consumers absorb the tax hike, the governor’s plan would end collection of the state’s portion of the gas tax. The 17.5-cent-per-gallon tax on diesel purchases would continue.
The governor said early this month that more than two-thirds of the state’s diesel fuel is sold to out-of-state truckers.
Also included in the plan is a vehicle registration fee hike and imposing a fee on alternative fuel vehicles.
The main part of the funding package would eliminate the state’s 17.5-cent-per-gallon gas tax in exchange for increasing the 5 percent sales tax by 0.8 percent. Also included is a provision to raise the current 0.5 percent of the sales tax routed to transportation to 0.75 percent over five years.
One change made to the bill Wednesday addresses a concern of many lawmakers and Virginians about toll taxes on I-95. The committee voted to have the Virginia Department of Transportation study whether the new funding plan would ease or eliminate the need to charge road users to access the roadway.
A request to charge tolls on I-95 in Sussex County is awaiting final approval by the Federal Highway Administration.
Ryan Bowley, OOIDA’s director of legislative affairs, said it is good to see state officials addressing the challenges facing transportation funding and the structural challenges of heavy reliance on the state’s fuel tax. However, he is alarmed to see a plan that shakes up the user-pays approach for motorists.
“Moving it so far away from a user-pays structure totally opens the door for money to be pulled away for other uses,” Bowley said. “They could be opening up a Pandora’s box where dollars get diverted away from the highway program.”
The Senate Finance Committee is scheduled to take up for consideration a companion bill Thursday, Jan. 31. If House and Senate lawmakers approve differing versions of the legislation a select group of lawmakers representing both chambers would meet to reach agreement on provisions before the funding plan could move to the governor’s desk.
OOIDA encourages Virginia truckers to contact their state lawmakers about the transportation funding plan.
To view other legislative activities of interest for Virginia, click here.
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