Gov. Bob McDonnell has proposed multiple amendments to the transportation funding package that the Virginia General Assembly passed earlier this year, lowering some fees and slightly reducing the amount of new revenue that the legislation will generate.
The General Assembly will consider the governor’s amendments during the reconvened session April 3.
“Virginia’s economy depends upon a safe, reliable, efficient transportation system spanning all areas of the Commonwealth,” McDonnell said in a released statement announcing his amendments. “This is why I have substantially agreed to the provisions in the compromise bill that passed our legislature.”
In all, his changes would reduce the anticipated new statewide transportation funding by about $80 million over five years and the Northern Virginia portion by about $70 million over five years, according to the Northern Virginia Transportation Alliance. However, the legislation is still expected to raise about $5.9 billion in new transportation revenue over the next five years, according to McDonnell’s office.
The amendments don’t touch the major funding sources that were part of the legislative compromise: Replacing the 17.5 cents-per-gallon gasoline tax with a 3.5 percent wholesale gas tax and 6 percent wholesale diesel tax and an increase of three-tenths of a percentage point in the state sales tax, which would be dedicated to transportation funding.
There is also a 0.7 percent local sales tax increase for Northern Virginia and Hampton Roads, bringing the sales tax in those locations to 6 percent.
McDonnell’s proposed changes include reducing the proposed $100 annual fee for hybrid and alternative fuel vehicles to $64 per year and lowering the proposed vehicle titling tax from 4.3 percent to 4.15 percent.
It also significantly reduces the proposed fee on real estate transactions in Northern Virginia and Hampton Roads, from 25 cents per $100 of value to 15 cents per $100. McDonnell said the 25-cent rate was set based on incorrect data and that the 15-cent rate will still generate the $30 million per year that the legislation intended to collect from this source.
The governor also proposed limiting the hotel tax increase in Northern Virginia and Hampton Roads to 2 percent, rather than the 3-percent increase included in the package that passed the legislature.
McDonnell proposed additional technical and legal amendments to the bill he believes will help protect it from a future court challenge and help ensure that the new funding can’t be diverted to other uses in the future.
Two local legislators said they will continue to fight the new registration fees for hybrid cars, which do use gasoline. McDonnell had justified the fee because alternative fuel vehicles aren’t paying gas taxes and hybrid drivers buy less fuel.
Del. Scott Surovell (D-Dist. 44) said it is unfair to single out a specific technology and that some traditional gasoline engines now get equivalent mileage to hybrids on the low end. Surovell and Sen. Adam Ebbin (D-Dist. 30) collected more than 7,000 signatures on a petition to remove the feed.
“We still believe that hybrid drivers should not be singled out to pay higher taxes,” Ebbin said in a released statement. “Typically, they already pay higher titling taxes, higher annual personal property taxes and higher sales prices for being good environmental stewards.”
Surovell and Ebbin plan to introduce legislation to repeal the fee during the next legislative session.