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Commentary:Paving the Way

The Reconvened Session of the General Assembly that met last week concluded work for this year on the most significant funding program for transportation infrastructure approved by the legislature since the historic special session in 1986. The bill that had previously passed the legislature in the 2013 Regular Session was sent to the governor for his approval and signature. He proposed a series of amendments that were voted on last Wednesday, April 3, and approved by the House and the Senate. The governor will now sign the bill into law.

There is no getting around the fact that the new law will cost the motoring public some extra dollars. One advantage of the bill is that it raises most of the money from those who use the roads. The more vehicles you buy, the more gas you use, or the more cars you title the more you will pay for the construction and upkeep of the roads. This very point allowed some legislators who were opposed to raising taxes to vote for the bill, for they considered the new revenues to be coming from “user fees.” By whatever name is necessary to develop pubic understanding, the new law establishes a framework for revenue growth that will help keep up with the cost of inflation and growth. The cents per gallon gasoline tax for example will be replaced with a sales tax on the wholesale price of gasoline. It is doubtful that there will be a noticeable change in gasoline prices at the pump considering the fluctuations in gas prices that already occur based on market factors.

The purchase of new cars has always had a reduced sales tax rate. The current 3.5 percent will become 4 percent on July 1, 2013, and will increase slightly each year until it reaches 4.15 percent on July 1, 2016, still below the sales tax on all other purchases. For the special needs of Northern Virginia there will also be a “congestion relief fee” of $0.15 per $100 value of the net sales price of a home. A transit occupancy tax on hotel rooms at the rate of 2 percent is also established for Northern Virginia. While the new law strengthens the statewide maintenance and construction fund, it recognizes the unique needs of the suburbs of Northern Virginia and Hampton Roads and provides that the special funds that are raised in those regions stays there for use in the region. No more sending money to Richmond with a percentage of it not making its way back. Language in the law also requires that priority be given to projects that offer relief from congestion.

There is a strong mass transit component to the law that provides funding for inter-city rail and $300 million off the top to help with the funding of the Silver Line. The additional funds should help keep tolls to a more reasonable level on the Dulles Toll Road.

The governor offered an amendment at my request and the urging of others that the alternative fuel fee be eliminated or reduced. He chose to reduce it from $100 to $64. The House leadership has committed to a study of the fee during this year to consider if it should be re-assessed and if so, the amount, and the special vehicles to which it should apply. I expect major revisions on this issue in the 2014 session. The job is not totally complete in other areas as well. Clearly, though, we have paved the way for Virginians and the future.