Virginia lawmakers approve $3 billion road funding plan

By Keith Goble, Land Line state legislative editor | Monday, February 25, 2013

A $3 billion transportation funding plan is headed to Virginia Gov. Bob McDonnell’s desk for his signature. The funding initiative also prohibits tolls on Interstate 95.

OOIDA Executive Vice President Todd Spencer commended Virginia lawmakers for addressing the challenges facing transportation funding and the structural challenges of heavy reliance on the state’s fuel tax.

Senate lawmakers voted 25-15 on the final day of the regular session to endorse a compromise bill to overhaul how the state collects taxes on fuel purchases. Saturday’s Senate vote came one day after House lawmakers voted 60-40 to endorse the state’s first major transportation reform in more than a quarter century.

“This is a historic day in Virginia. We have worked together across party lines to find common ground and pass the first sustainable long-term transportation funding plan in 27 years,” McDonnell said in prepared remarks following Saturday’s Senate vote.

The funding plan includes converting Virginia’s 17.5-cent-per-gallon excise tax on gas and diesel to a wholesale tax.

Gasoline sales would include a 3.5 percent wholesale tax, or “at the rack tax,” and diesel purchases would include a 6 percent levy. The tax rates would rise with inflation.

The change in tax collection would initially equate to about a 10.5-cent-per-gallon gas rate. Delegate Chris Jones, R-Suffolk, told lawmakers Friday, Feb. 22, during floor discussion that the diesel rate would equate to 21 cents per gallon.

Another part of the funding plan would increase the state’s general sales tax from 5 percent to 5.3 percent. The additional 0.3 percent would go to transportation.

Also included in HB2313 is a provision to increase the amount of general fund money that goes to transportation by $200 million.

A separate regional component would allow certain localities to collect additional taxes for local projects. Specifically, areas like Hampton Roads could impose a 0.7 percent sales tax increase.

The additional revenue could amount to another $200 million each year for regions around the state.

McDonnell said the regional component will provide areas such as Northern Virginia and Hampton Roads “the resources they have long requested to address their pressing, local transportation needs.”

One more provision included in the bill prevents tolls from being added to Interstate 95.

A request to charge tolls on I-95 south of Fredericksburg is awaiting final approval by the Federal Highway Administration.

To view other legislative activities of interest for Virginia, click here.

Editor’s Note: You are welcome to share your thoughts with us about this story. Comments may be sent to state_legislative_editor@ooida.com.

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