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Road revenue bills filed by legislators

BY CHELYEN DAVIS

THE FREE LANCE-STAR

With less than two weeks before the start of the General Assembly’s session, some lawmakers aren’t waiting to see what Gov. Bob McDonnell’s promised transportation funding proposal contains.

They’re filing their own bills.

At least two Republican delegates have filed bills to index the gas tax—making it a percentage tax—and Del. Mark Cole has a bill to increase the amount of existing sales tax revenue that goes to transportation.

Del. Tim Hugo’s bill is perhaps the largest in scope—he wants to eliminate the gas tax entirely and replace it by raising the state sales tax from 5 percent to 5.9 percent, devoting the additional revenue to transportation. He would also increase by 0.5 percent the amount of existing sales tax revenue devoted to transportation.

In a news release, Hugo said others’ proposals to increase or index the gas tax are “short-term fixes” because the purchasing power of the gas tax will continue to decline as cars get better mileage and more people turn to alternative-fuel vehicles.

Virginia’s 17.5-cents-a-gallon gas tax hasn’t been raised since 1986; McDonnell has said the gas tax is now worth about 45 cents for every dollar it was worth originally.

Hugo’s press release didn’t include revenue projections, and his bill hasn’t been posted on the General Assembly’s website yet.

But according to a Senate Finance Committee staff report, the gas tax is expected to generate $819 million in revenue in this budget year, which began July 1. The same report said that every 1 percentage-point increase in the state sales tax would generate about $1 billion.

Hugo said in his release that his proposal would provide about $500 million more a year to transportation—the same figure McDonnell has promised for his own transportation proposal, which he hasn’t yet unveiled.

“There is no question that funding for Virginia’s transportation needs is sorely lacking,” Hugo said in his release. “Immediate action is necessary to prevent the Commonwealth from running out of funds in FY 2017 for the construction of new transportation infrastructure projects.”

The question of new construction money is what is driving McDonnell’s promise to tackle transportation funding this session. For years, lawmakers have known that the state’s road-maintenance needs are steadily draining its construction fund, since state law requires dollars to first go to maintenance.

McDonnell has said he wants the 2013 session—his last one in office—to be the year state leaders finally address the issue in a long-term fashion.

McDonnell has hinted at openness to indexing the gas tax to make it a percentage tax, and his budget proposals earlier this month also included a provision to divert an additional portion of the existing sales tax for transportation.

Democrats, especially in the Senate, object to that, because the sales tax revenue flows into the general fund and pays for other programs like education and health services.

But many Republicans prefer that to raising the gas tax.

Cole, R–Spotsylvania, has filed a bill that would increase the amount of existing sales tax devoted to transportation, from the current 0.5 percent to a full 1 percent, phased in in 0.1 percent increments.

Cole’s bill specifies that the increase in sales tax going to transportation only happens as long as general fund revenues increase, and it doesn’t result in a reduction in the general fund.

Two Republican delegates —Del. Bob Purkey and Del. Jim Scott—have filed bills to index the gas tax. Purkey’s bill would index it to the “average percentage change in the U.S. Department of Transportation’s Transportation Services Index for the three years ending Oct. 31 of the year immediately preceding the affected year.”

Scott’s bill would have the Department of Motor Vehicles commissioner calculate a percentage rate that would yield about the same amount as the cents-per-gallon rate does, and then apply it to the average price per gallon, recalculating the average price every six months.

Chelyen Davis: 540/368-5028

cdavis@freelancestar.com

Permalink: http://news.fredericksburg.com/newsdesk/2012/12/28/road-revenue-bills-filed-by-legislators/

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