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Is It Dead Yet?

Plan to raise taxes in Northern Virginia to pay for roads is still under consideration.

Dave Albo is growing increasingly frustrated with the government’s attitude. After months of wrangling, the Virginia General Assembly was unable to reach an agreement which would provide for substantial new funding for transportation.

Other parts of the state do not suffer from the severe traffic congestion common to this region, Albo said, and so they are not willing to raise taxes to help Northern Virginia out of its problems. "They call it a Commonwealth. It’s not. I think it’s a rip-off wealth for Northern Virginia," said Albo, a Republican delegate from the Springfield area.

The solution, according to Albo and a group of other Northern Virginia Republicans, is to create local taxes in Northern Virginia, which would help to fund transportation construction locally.

The group, lead by Albo and Del. Tom Rust (R-86), and including Dels. Joe May (R-33), Vince Callahan (R-34), Michelle McQuigg (R-51) and Scott Lingamfelter (R-31) has proposed three options. Two of these would not actually involve raising taxes but would instead mandate that a portion of existing taxes – the recordation tax for one option and income tax for the other – would remain in Northern Virginia.

Neither is likely to pass, Albo said, since legislators from other parts of the state would be unwilling to see the tax dollars disappear from Richmond.

A more viable option would be to raise a package of taxes, but to do it locally. The plan Albo envisions would give localities authority to increase a set of taxes, but then mandate that the revenue generated by these taxes be given to the Northern Virginia Transportation Authority. The Authority would then spend the money on local transportation needs. Since the money would never go to Richmond, there is no way for the General Assembly to take a portion of it.

Localities which do not adopt the package of tax increases would not be eligible to receive funding for projects. The localities included are Arlington, Fairfax, Loudoun and Prince William counties, and the towns and cities within the area.

The proposed taxes include: an increase of $30 for registering a car, a 0.75 percent tax paid the first time someone registers a car (either buying it new or moving to the area) five percent additional on hotels per room, two percent additional on car rentals, a 30 cent surcharge added to the property taxes of commercial and industrial properties, and an impact fee on new home construction of $5,000 per single family home, $4,000 per townhouse and $3,000 per condo or apartment. The development impact fees would be in addition to any proffered improvements. Combined, this is projected to generate $451 million annually.

The bill also envisions keeping 10 cents of the existing recordation locally, although Albo says this portion, at least, will have a very difficult time passing. With the recordation tax included, the region could generate up to $578 million.

Albo, who had supported the half-cent referendum in 2002, had introduced a similar bill during the regular session which was voted down. He thinks it might stand a better chance in the special session, however, since there was no agreement on new funding.

Albo says he does not like the tax increases, and stressed that he thinks taxes are too high, but he sees few alternatives. "I can cry and be a martyr and you guys are not going to get any roads, or I can try to build you some roads," he said.

"Certainly it makes sense to target the areas with the biggest needs," said Stewart Schwartz of the Coalition for Smarter Growth.

ROADS ARE NOT the sole focus of the plan. The bill mandates that the first $50 million each year be given to Metro. This would represent the dedicated funding source needed to secure a potential $1 billion in federal funding being proposed by U.S Rep. Tom Davis (R-11).

The next $20 million would go to VRE. Beginning in 2012, $50 million annually would go toward funding the expansion of Metro (or a similar system) to Potomac Mills in Prince William County.

The bill currently calls for spending $20 million per year on the second phase of extending Rail to Dulles Airport. However, Albo said that provision was put in before there was a deal to have the Metropolitan Washington Airports Authority take over construction and funding for the line, and may be removed.

The bill mandates that 40 percent of the total money collected be spent on improvements to smaller neighborhood roads, and includes a set of specific small projects that must be built first. [see sidebar]

The balance is largely left to the Northern Virginia Transportation Authority to spend on their 2030 plan, a regional list of transportation projects which will cost about $30 billion (about $16 billion of that has an identified funding source).

Schwartz criticized the 2030 plan, noting that it focuses too much on expanding highways and not enough on altering land use patterns and encouraging alternative modes of transportation.

The bill further mandates that the authority hire private contractors to do the work. If the contractors do good work, they can be hired again, but they are to remain wholly private companies. "The whole purpose is we’re not beginning another VDOT," Albo said.

ONE OF THE major obstacles to the plan will be Richmond politics. Although the General Assembly will likely begin meeting in September to address transportation, many of the problems which plagued the issue during the regular session remain.

"It’s difficult to be optimistic about its chances," said Del. Brian Moran (D-46). Moran chairs the Democratic caucus in the House of Delegates.

The Governor, State Senators from both parties and Democrats in the House of Delegates all proposed raising some taxes to provide funding. Although not optomistic about its chances, Moran does not dismiss the idea. "We welcome any and all plans," Moran said.

But House Republicans refused to increase taxes during the regular session, many citing the state’s $1 billion budget surplus as evidence that there was no need for an increase.

But the surplus wouldn't actually amount to much said Sen. Jeannemarie Devolites Davis (R-34). Northern Virginia would see just over $100 million of the surplus, spread over two years. And if the region is willing to make the commitment of $50 million per year to Metro, almost nothing is left for new construction.

Devolites Davis and others also point to the year 2010. According to budget estimates, in that year, VDOT will only have enough money for maintenance, and nothing for new construction.

At that point, the state will be forced to find some new funding sources. "It’s do it now, or do it three years from now," she said.

While she thinks that regional plans for Northern Virginia and Hampton Roads could pass, they may run into other problems in the Senate, Devolites Davis said. Some members might not be willing to accept a regional plan, reasoning that it would make people from those regions less likely to support a statewide plan in future years.

But she points out that the proposed regional plan will not provide all the necessary funding and a statewide plan could help to make up the difference.

"Of course we would support a statewide plan," she said.

Gov. Tim Kaine (D) would be unlikely to support a solely regional solution, said spokesperson Kevin Hall. "He could be supportive of regional pieces so long as it is part of a statewide fix," Hall said.

For now, Albo, Rust and the others are engaged in listening to area residents about ways they might improve the bill, prior to its formal introduction. Some in the business community have said that they would pay a disproportionate share, and that is something which may be addressed, Albo said. He may also try to include a provision that the money from impact fees be used in proximity to the development where it was generated.

But Albo cautions that while he welcomes "constructive criticism" he is not interested in hearing from people who are simply opposed to the idea. "I want to hear from you – unless you’re going to tell me you’re not paying."