Virginia Gov. Bob McDonnell on Monday, May 13, ceremonially signed a five-year, $6 billion transportation funding plan. The funding initiative also prohibits tolls on Interstate 95.
McDonnell commended lawmakers for taking action to approve the state’s first comprehensive transportation funding plan in 27 years. He said that while it may technically be transportation legislation, at the end of the day it’s a jobs bill.
“This legislation will ensure that Virginia’s economy can grow in the years ahead, and that businesses will have the infrastructure they need to create the good-paying jobs Virginians deserve,” McDonnell said in a news release.
One of the governor’s legislative priorities for the year includes an overhaul for how the state collects taxes on fuel purchases. Effective July 1, Virginia’s 17.5-cent-per-gallon excise tax on gas and diesel will be converted to a wholesale tax.
Gasoline sales will include a 3.5 percent wholesale tax, or “at the rack tax,” and diesel purchases will include a 6 percent levy. The tax rates will rise with inflation.
The change in tax collection is expected to initially equate to about a 10.5-cent-per-gallon gas rate. The diesel rate is estimated to be 21 cents per gallon.
Another part of the funding plan will increase the state’s general sales tax from 5 percent to 5.3 percent. The additional 0.3 percent will go to transportation.
The amount of general fund money that goes to transportation will also be increased by $200 million.
A separate regional component allows Hampton Roads and Northern Virginia to collect additional taxes for local projects. Specifically, the areas will raise more than $1.5 billion and $1 billion over the next five years, respectively.
The governor said the regional component will allow areas such as Northern Virginia and Hampton Roads “the resources they have long requested to address their pressing, local transportation needs.”
To view other legislative activities of interest for Virginia, click here.
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