The state transportation funding plan that passed the Virginia General Assembly Saturday will lead to the investment of tens of millions of dollars in roads and transit in Fairfax County in the coming years.
The slate of new taxes and fees in Northern Virginia will directly provide the county about $47 million per year, according to preliminary county staff estimates, plus the county will benefit from new regional and state funding.
“From an economic perspective, I think this bill is going to be a tremendous benefit to the commonwealth, especially Northern Virginia,” said Robert Cox, chair of the construction group in the Tysons Corner offices of law firm Williams Mullen.
The spending on new construction will provide a much-needed shot in the arm for the construction industry, which has seen flat or declining revenues, he said.
“The states are the ones that invest in and pay for these projects, and the states just don’t have the money,” Cox said.
Like the federal American Recovery and Reinvestment Act did several years ago, the new spending will not only help those companies but the also materials suppliers, electricians and others that construction companies buy things from.
In addition to the money going directly to localities, 70 percent of the money raised from new local taxes and fees will support regional projects under the Northern Virginia Transportation Authority.
Fairfax County Board of Supervisors Chairwoman Sharon Bulova (D-At large) held up a copy of NVTA’s TransAction 2040 plan at Tuesday’s Board of Supervisors meeting as she spoke about the state transportation bill.
“I remember when we started working on this last year that there were some folks who were a little bit cynical … because there was no money to make the plan happen,” Bulova said.
Now, the NVTA will be getting hundreds of millions of dollars a year to invest in its prioritized list of regional projects.
The bill also included $300 million in additional state funding for the Silver Line construction, which is anticipated to help keep down tolls on the Dulles Toll Road. Much of the Silver Line is being paid for with bonds backed by future toll revenues.
Local funding sources include a higher sales tax, a 3 percent increase in the local hotel tax and a grantor’s tax of 25 cents per $100 of value. The grantor’s tax is paid as part of selling a home.
With the 0.7 percent local sales tax increase and the 0.3 percent statewide sales tax increase, the sales tax in Northern Virginia will increase to 6 percent, with the extra 1 percent being dedicated to transportation.
The other major element of the statewide funding package, expected to generate $880 million per year by 2018, include replacing the 17.5 cents-per-gallon fuel tax with a 3.5 percent wholesale gas tax and a 6 percent wholesale tax on diesel fuel.
Other funding will come from a $100 annual registration fee for alternative fuel vehicles and an increase in the vehicle sales tax from 3 percent to 4.3 percent.
The General Assembly has been struggling for more than a decade to resolve the state’s transportation funding challenges. House of Delegates Speaker William Howell (R-Dist. 28) called the passage a “truly historic moment.”
“For several decades now transportation loomed as an issue that seemingly could not be solved,” Gov. Robert McDonnell said in a statement following the bill passage. “Lines were drawn and debates droned on as motorists sat in traffic. Today we have shown a path forward, a path past the old political arguments and endless posturing that threatens the economic prosperity and competitiveness of our state and nation.”
McDonnell had advocated eliminating the gas tax in favor of a higher sales tax, a concept that won support in the House, but state senators instead wanted to reform the gas tax. Legislators ultimately compromised and did both.
“Make no mistake — this is a compromise piece of legislation. Neither Republicans nor Democrats achieved exactly the kind of solution that they wanted,” Howell said in a released statement. “But this moment shows why Virginia is so fundamentally different from the rest of the country: in a time of crisis and need, we came together and worked in a bipartisan fashion to find a solution. We did not stick our heads in the sand. We did not duck the tough decisions.”
Anti-tax groups brought a last-minute lobbying push to fight the transportation bill due to its reliance on new taxes. Attorney General Ken Cuccinelli, the Republican nominee for this year’s race for governor, was among those opposing the bill that was agreed to in a House-Senate conference committee.
“I have always believed—and continue to believe—that raising taxes should be the last resort in public policy,” Oak Hill Del. Jim LeMunyon (R-Dist. 67) said in a letter to constituents explaining his support for the bill. “I take no joy in telling you that with respect to transportation funding, we are at the last resort. But I believe enacting this imperfect legislation is better than any alternative to address Northern Virginia’s transportation problems.”