By Stephen Nielsen
Capital News Service
RICHMOND – A divided Virginia Senate on Saturday passed Gov. Bob McDonnell’s signature issue of the 2013 legislative session – a bill to overhaul the state’s system for funding transportation.
Just hours before the session’s end, the Senate voted 25-15 for House Bill 2313, which will raise about $880 million a year more for roads and mass transit by increasing sales taxes while lowering the fuels tax.
The debate over how to increase revenue continued right up to the vote.
“This isn’t any bill. This is the only bill,” said Senate Majority Leader Thomas Norment, R-Williamsburg. Supporters said it’s the only way to provide the revenue Virginia’s transportation system needs – and to ease traffic congestion in Northern Virginia and Tidewater.
“To me, the final bill represents bad economics and bad transportation policy,” said Sen. Adam Ebbin, D-Alexandria. He said the state should raise its gasoline tax to address the problems.
HB 2313, which was negotiated by a conference committee and approved 60-40 by the House on Friday, would:
- Eliminate the 17.5-cents-per-gallon gasoline tax that consumers pay at the pump. Instead, the state would impose a 3.5 percent tax on gasoline at the wholesale level. The wholesale tax on diesel fuel would be 6 percent.
- Increase Virginia’s sales tax from 5 percent to 5.3 percent.
- Raise the motor vehicle sales tax from 3 percent to 4.3 percent.
- Charge a $100 annual license tax for electric and alternative fuel vehicles.
- Allow a 0.7 percent sales tax increase in Hampton Roads and Northern Virginia to fund transportation projects there.
HB 2313 also would boost the proportion of the state’s general fund revenue dedicated to transportation from 0.5 percent to 0.675 percent. And it would prohibit tolls on Interstate 95 south of Fredericksburg without approval from the General Assembly.
“This is truly the best we’re going to get,” said Sen. Janet Howell, D-Fairfax.
Other senators echoed that sentiment.
“Do I feel like we have anyone in this body that can make a perfect plan? No,” said Sen. Charles Carrico, R-Galax. But he said the transportation plan was close enough and a product of a great deal of compromise between parties.
Still, a dozen Republican senators and three Democrats voted against the bill.
“I don’t agree with having different tax rates in different parts of the commonwealth,” said Sen. J. Chapman Petersen, D-Fairfax.
“Having a regional tax in Northern Virginia – that means my constituents are going to have a surcharge on all their consumer goods, just for living in that one part of the state. I don’t see the fairness in that, so I voted no.”
HB 2313 now goes to McDonnell for his signature.
In a press release, the governor said, “The annals of history will recognize this session as the year that vital transportation funding reforms, substantively ignored since 1986, were enacted to address the decades-old issues that have left Virginia unable to maintain our existing road, rail and transit infrastructure and unable to pay for needed new transportation services.”