In an effort to leave a lasting legacy as the “Transportation Governor,” Bob McDonnell has proposed a tax increase to achieve that goal this year. “Virginia’s Road to the Future,” as it is billed is paved with a mixture of both good intentions and bad solutions. It is legislation that in its current form should be amended to remove the tax increases by the General Assembly.
This is not the first time Governor McDonnell has sought to address Virginia’s transportation crisis. Prior attempts to prioritize funding for transportation projects and road maintenance, however, did not raise taxes. From privatizing ABC, the state-run alcohol business, to directing new growth revenue to highways and requiring that a greater portion of collected state revenue be directed to transportation, each of his efforts unfortunately were defeated by those who wanted tax hikes rather than more roads.
The proposals were stopped by almost all Democrats and a few Republican state senators who said that the only way additional resources could go towards transportation on their watch would be under the condition that taxes went up. This is an old ploy. Demanding that more revenue be directed to transportation in exchange for higher taxes demonstrates that transportation is their lowest priority. Their actions tell us that they believe everything else in the budget is more important than transportation.
The anti-transportation pro-tax increase wing of the General Assembly, comprised of Democrats and a core of at least 3 Republican state senators, is the only thing that stands in the way of a more sustainable transportation funding plan. They should not be allowed to raise taxes. They should not be allowed to prevent the Governor from new transportation construction projects.
When members of the General Assembly say they are unable to prioritize state spending for transportation, they are referencing opposition from not only Democrats but from Republicans like Senators Frank Wagner, John Watkins, and Tommy Norment. From hijacking recent attempts to shift more state revenue to transportation to supporting Governor Warner’s $1.4 billion tax increase, these are the culprits that have put Virginia in the transportation crisis it is currently enduring.
The Governor’s current plan is designed to win over this wing of the General Assembly. According to the Governor’s own revenue projections, this is how that tax hike breaks down:
- Over 5 years, the plan to replace the gas tax with a 16% higher sales and use tax is a $607 million tax increase;
- Over 5 years, the plan to increase vehicle registration fees by $15 per year is a $547 million tax increase;
- Over 5 years, the plan to implement a $100 alternative fuel vehicle fee is a $66.6 million tax increase;
- Even worse, if the Governor successfully lobbies Congress to implement a national internet tax by passing the Market Place Equity Act, taxes rise by $1.2 billion over 5 years.
Supporters of the governor’s original goals – to prioritize transportation funding as part of currently collected and new growth revenue – should reject the tax hikes in the proposed plan. They should remove the tax hikes from the “Road to the Future” and replace them with a shift of a greater share of sales and use tax revenue collections to transportation costs and projects.
Supporting the Governor’s proposed plan otherwise is a massive tax increase that Virginia taxpayers cannot afford.
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