Compromise Reached on Historic Transportation Funding Reforms - NBC29 WVIR Charlottesville, VA News, Sports and Weather

Compromise Reached on Historic Transportation Funding Reforms

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For the first time since 1986, Virginia could see a major overhaul in how the state pays for transportation projects. Negotiators in the House of Delegates and state Senate reached a compromise Wednesday morning.

If approved by both Houses and signed by the governor, the plan would completely change the funding structure for roads, rail and transit in the state - and it comes at an important time. Virginia has slipped in national business rankings in the past year, largely due to infrastructure issues. A new study released this month by the Texas Transportation Institute also shows Northern Virginia has the worst traffic congestion in the country.

This plan aims to alleviate some of those problems. It would replace the current 17.5 cent fixed gas tax at the pump with a new 3.5 percent tax on gas at the wholesale level. A separate 6.0 percent tax would apply for diesel fuel, accounting for the inordinate wear and tear caused by larger diesel vehicles.

The plan increases the sales and use tax 0.3 percent, and boosts the amount of general fund revenue earmarked for transportation projects. It also maintains a suggestion by Governor McDonnell to charge a $100 fee for alternative fuel vehicles, and institutes a "local option" for areas like Hampton Roads and Northern Virginia to raise their own revenue for specific regional projects.

The compromise would pump $860 million in additional funds into transportation annually by 2018.

Commonwealth of Virginia
General Assembly

House and Senate Negotiators Reach Deal on Landmark Transportation Funding Package

RICHMOND, VA, 20 February 2013 –– Negotiators working on behalf of the House of Delegates and the Senate of Virginia today announced agreement on a landmark transportation funding package. The compromise plan, when fully implemented, would increase funding for transportation by more than $860 million annually. The conference committee report on House Bill 2313, originally introduced by Speaker of the House William J. Howell (R-Stafford) at the request of Governor McDonnell, must now be approved by majorities of both the House and Senate in order to become law.

"When Governor McDonnell and I outlined the foundation of our transportation plan at the beginning of this session, we said we wanted a long-term solution to Virginia's infrastructure needs," said Speaker Howell. "By replacing the current 17.5 cent per gallon gas tax with a 3.5 percent wholesale gas tax and a 0.3% sales tax increase, and dedicating additional general fund revenue, we are shifting Virginia away from its reliance on a diminishing revenue source toward a more stable and sustainable funding stream that will address our funding needs.

"I want to thank Governor McDonnell, the House and Senate conferees, particularly Chris Jones and Frank Wagner, and all members on both sides of the aisle who have contributed ideas and input throughout the legislative process. We are on the verge of addressing one of the largest and most complex public policy challenges in our recent history. I urge everyone to recognize that this compromise is the best path forward for the Commonwealth."

The plan in the conference report will generate $3.5 billion in funding for Virginia's transportation system over the next five years by replacing the current 17.5 cent per gallon gas tax with a 3.5 percent wholesale tax applied at the rack, increasing the sales tax by 0.3%, dedicating $200 million per year of existing general fund revenues to transportation, applying a $100 alternative-fueled vehicle fee, and reducing the current discount on the sales tax on motor vehicles by 1 percent. Addressing the unique challenges of the Commonwealth's two most heavily congested regions, Northern Virginia and Hampton Roads, the plan generates additional revenues in those regions to meet their transportation needs. The legislation also applies a 6 percent wholesale tax on diesel applied at the rack and designates revenue from the Marketplace Fairness Act for transportation.

"What makes this legislation so significant and important is that it is comprehensive and addresses transportation for the long term," noted Senate Finance Committee Chairman Walter A. Stosch (R-Henrico). "This measure offers us a once-in-a-generation opportunity to meet our immediate transportation challenges, and solve this problem for decades to come."

"This is a comprehensive, long-term transportation solution that addresses Virginia's critical transportation funding needs," said Delegate S. Chris Jones (R-Suffolk). "This legislation invests $3.5 billion in Virginia's transportation network over the next five years, closes our maintenance shortfall and generates money for new construction that will allow us to update our infrastructure and build a 21st century transportation network. I want to thank my fellow conferees for their hard work and genuine efforts to come together and solve this complex problem. This was a team effort and I am very proud of what we were able to accomplish."

"This is a huge moment for Virginia," declared Senator Frank W. Wagner (R-Virginia Beach). "We are on the cusp of bringing home real and lasting transportation solutions that will move Virginia forward now and in the future. And, the plan recognizes the importance of the economic vitality of Northern Virginia and Hampton Roads by addressing the special needs of those two regions."

"Northern Virginia has borne the brunt of the Commonwealth's transportation challenges for the better part of the last 20 years," said Dave Albo (R-Fairfax)."Northern Virginia is ranked as the most congested area in the entire United States. This plan will solve the problem by creating a new dynamic revenue stream and allowing Northern Virginia to keep more of its transportation dollars – 100% of the money raise in our region will stay in our region. This is exactly the kind of real, bipartisan solution that makes Virginia so very different than our friends across the Potomac."

"Through hard-fought negotiations we have reached a good, old-fashioned legislative compromise that represents the interests of both Democrats and Republicans in the House of Delegates," said Delegate Onzlee Ware (D-Roanoke). "Throughout this process, it has been important to our party to develop a long term solution that generates enough revenue to adequately address our needs without stripping funding to other core government services. This plan dedicates additional general fund revenue to education and ensures that if the Marketplace Fairness Act is passed by Congress, revenue from that legislation will also be dedicated to education."

"Our accomplishment with this plan is the recognition of an ailing transportation system and the identification of a long-term solution, one we've needed for the last decade," said Senator John C. Watkins (R-Powhatan). "I congratulate the House and the Senate conferees for working together to come to that end. It is my hope that the Governor will recognize this success and approve this measure when it comes to his desk."

"By reducing and replacing the current gas tax with a wholesale tax, we will reduce the gas tax burden on Virginia families," said Delegate Beverly Sherwood (R-Frederick)."This plan addresses the long-term needs of both the rural and suburban areas of the Commonwealth without unfairly increasing the burden on Virginia families. I am confident that this plan can and will pass both the House and Senate and I look forward to Governor McDonnell signing it into law."

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