This past week I sent my delegate, Mark Keam, a partially altered letter crafted by the folks at Coalition For Smarter Growth noting my disappointment with the current proposed transportation plan by Governor McDonnell. Attached is his response and stance on the important legislation at hand for the Commonwealth;
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Thank you for writing to me about Governor Bob McDonnell’s transportation bill. I appreciate hearing your views on this important topic.
House Bill 2313 was introduced by Speaker of the House Bill Howell on behalf of the Governor in an effort to deal with the tremendous shortfalls in transportation funding. The bill contains several provisions, but its centerpiece is designed to fundamentally change the way Virginia funds transportation.
HB 2313 would eliminate the current 17.5 cents per gallon that the state collects in motor fuels tax. To replace the lost revenues from ending the gas tax, the Governor would raise the sales tax from 5 cents to 5.8 cents per dollar, and apply this margin to transportation.
In addition to the new sales tax increase, the Governor’s bill would divert an extra 0.25 cent from existing sales tax to pay for $300 million in Dulles Metro Expansion. Currently, the state diverts 0.5 cent of every dollar in sales tax to use on transportation maintenance generally, so it would increase to 0.75 cent. The Governor’s bill would also raise the vehicle registration fee by $15 per car, and dedicate the new funds to intercity passenger rail and transit. Similarly, the bill would add a new $100 fee for every alternative fuel vehicle, such as hybrids and electric cars, to fund transit options.
Finally, the proposal anticipates that millions of dollars in new revenues will be brought into Virginia to pay for transportation once Congress passes the Marketplace Equity Act, which would allow states to collect out-of-state sales taxes on purchases made on the Internet.
When I learned of this proposal last month, I publicly applauded Governor McDonnell for making transportation funding a top priority during his last year in office. He could have chosen an easier issue to bolster his legacy as an outgoing Governor, so I respect the courage he demonstrated in his willingness to tackle a very tough problem.
As everyone who lives in our area knows, the Washington region continues to suffer from the worst traffic congestion in the nation. Just this week, Texas A&M University ranked our area #1 in the nation – for the second year in a row – in terms of the amount of time and money wasted sitting in traffic.
But as bad as the transportation gridlock is in our region, the state’s inability to find a comprehensive traffic solution is even worse. For over 25 years, the Virginia General Assembly has been unwilling or unable to solve this problem, while witnessing the available funding for transportation decrease each year.
Unless something is done by the legislature now, Virginia will literally run out of money in the next 5 years to pay for any new construction projects. What little money that is left in the state’s budget for transportation will be spent to simply fill potholes and sustain minimal road maintenance.
Faced with this urgency, I told the Governor that I would work with him in good faith to seek a transportation solution during this legislative session. But I also told him that I have serious concerns about some of his proposals.
First, I strongly disagree with the Governor’s proposal to end the gas tax. While I agree with the Governor that the gas tax is a declining source of revenue, this is one of the very few dedicated streams of funds that make sense to pay for our roads. The Governor’s proposal would kill the goose that lays the golden egg.
Instead of getting rid of the gas tax, I believe we should increase it, or at a minimum, index it to inflation so the amount would adjust automatically depending on the economy. Virginia last set the gas tax in 1986 and it has not been touched since then. The rate of 17.5 cents is now the 40th lowest among those of the other states, which is especially apparent when compared to the 23.5 cents that Maryland charges, 20.5 cents charged in West Virginia, or the 38.9 cents per gallon charged by North Carolina.
Second, I would support increasing the sales tax if those funds would to come back to the regions from where they are collected. Northern Virginia pays a disproportionately high amount of sales tax to the state based on our wealthier population. Out of fairness, I think that we should receive a similar proportion of transportation funding back for our region from this sales tax increase.
Third, I have concerns about the Governor’s proposal to impose a new $100 fee for alternative fuel cars such as hybrids, electric, natural gas and clean diesel, because these are the types of innovations that will help our nation wean off of fossil fuels and lead us toward energy independence from overseas suppliers. Yet, if a consumer chooses to invest in these environmentally-sensible vehicles, they should not be punished by our state. The Governor’s proposal does exactly that by imposing a new fee that owners of less fuel-efficient cars, minivans, SUVs and trucks would not have to pay.
Finally, I am not convinced that Congress will be able to pass this internet sales tax law this year, which would mean that a third of the new moneys that the Governor anticipates in his bill would not be there in the end.
I believe the other parts of the bill are acceptable as they would add the much-needed new revenues to tackle the traffic congestion problems.
HB 2313 was referred to the House Finance Committee where I serve. As one of 22 members on that committee, I had the opportunity to debate and vote on this bill before the other 78 Delegates.
In the committee, several Democratic and Republican amendments were proposed but they not actually offered due to procedural reasons. I believed that these amendments would have improved the bill, for example, by keeping the gas tax in place and replacing the gas tax cut with a food tax cut.
Another amendment would have added a new provision to create a Northern Virginia taxing authority that would raise and spend transportation funds within our own region. Yet another amendment would have proposed a new wholesale tax for gasoline so that distributers of gas, instead of the consumer, would pay for this tax.
Considering the importance of this bill, the Chairman of the Finance Committee asked that all of these amendments be held off in committee and instead be considered on the floor. The Speaker of the House, who introduced the bill, also committed to entertaining many amendments on the House floor once the bill was moved out of committee.
As I said earlier, finding a transportation funding solution is of the utmost importance to our region, and I am eager to get a bill enacted this year. When the bill was introduced, I personally told the Governor that, although I have serious concerns with his proposal, I would keep an open mind throughout the long legislative process.
I also told colleagues on both sides of the aisle that I would work in a good faith effort to try to make the bill better for Northern Virginia. That is why, although I opposed the bill on the substance, I voted to move the bill out of the Finance Committee and onto the House floor.
I could have easily voted against this bill in committee, but I thought it was my duty to keep the legislative process moving forward so that everyone in the House could weigh in with their concerns and have a robust debate with amendments being offered.
Earlier this week, the full House – with all 100 Delegates present – had the opportunity to debate, amend and vote on the Governor’s bill on the floor. Through the legislative process, a few minor amendments were made, such as to strip out the hybrid fee and to add language that would allow for the consideration of a Northern Virginia taxing authority.
Even with these minor changes, however, my main concerns with the bill remained. When the vote was called to accept the substitute and to vote it out of the House, I voted against this version of the bill because I thought more improvements were needed before I could embrace it.
HB 2313 is now before the State Senate, and it is unclear what will happen there. The Senate debated but was unable to vote out any version of the Governor’s transportation bill, which means that the only bill in the entire legislature on transportation funding is the imperfect House version that I opposed.
If HB 2313 is defeated in the Senate, the Governor can always introduce another bill, or he can convene a special session of the legislature to continue working on a transportation solution. In either case, this will be a long process with several more votes ahead of us.
I will keep you updated through the next three weeks as this issue progresses. You can also track the progress of House Bill 2313 at http://lis.virginia.gov.
If you would like periodic updates during session, you can sign up for my news updates at http://www.DelegateKeam.org, or you can keep up with real-time updates by following me on Facebook and Twitter.
Thank you again for your interest in this issue.
Mark