Virginia Republicans Steer Clear of Governor’s Transportation Tax Proposal

Virginia Republicans Steer Clear of Governor’s Transportation Tax Proposal
January 31, 2013

Kenric Ward

Kenric Ward reports for watchdog.org. (read full bio)

Top Virginia Republicans are veering away from fellow Republican Gov. Bob McDonnell’s transportation-funding initiative, and a growing number of alternative plans threaten to block its passage.

Since unveiling his $3.1 billion program in January, McDonnell has garnered support from a variety of business groups, including chambers of commerce, realtors, and auto dealers.

But the governor’s call to abolish the 17.5-cents-per-gallon gasoline tax while increasing the state sales tax is a bridge too far for fiscal conservatives who label it a net tax increase.

A leading Republican running for attorney general is heading in the opposite direction.

Already Enough Money: Senator

Sen. Mark Obenshain (R-Harrisonburg) said the state already has enough money to pay for road projects; it just needs to prioritize its spending. He proposes to put transportation money in a “lockbox” to prevent lawmakers from siphoning funds for other purposes.

“My amendment would ensure that money deposited into the Transportation Trust Fund—most of it coming from taxes specifically related, and dedicated, to transportation—is spent exclusively on transportation projects,” he said.

Additionally, Obenshain estimates some $400 million in unanticipated revenue could have been used to supplement the transportation fund in each of the past three years.

McDonnell’s plan, which Obenshain characterizes as a 16 percent sales tax hike, seeks an additional $500 million in the first year.

Seen As Tax Increase

Three GOP candidates for lieutenant governor oppose McDonnell’s proposal. Businessman Pete Snyder, the Rev. E. W. Jackson, and Stafford County supervisor Susan Stimpson say they want no part of a tax increase.

State Delegate Rob Bell (R-Charlottesville), who is vying with Obenshain for the attorney general nomination, also said he opposes any plan that raises taxes.

Signaling a high-stakes battle in Richmond, House Speaker William Howell (R-Falmouth) is sponsoring McDonnell’s proposal. Presumptive GOP gubernatorial nominee Ken Cuccinelli has yet to formally declare his position.

Counter-Proposals Appearing

Several Republican lawmakers have introduced counter-proposals, though not all purport to be revenue-neutral.

Delegate Jim LeMunyon (R-Chantilly) would adjust the gas tax for inflation.

Del. Randy Minchew (R-Leesburg) would allow localities to impose a 10 cent per gallon gas tax.

Del. Tom Rust (R-Herndon) proposes a 5 percent gas tax to replace the current 17.5 cent levy, and would authorize planning district commissions to use an additional 0.5 percent of the sales tax and 15 cents per $100 of the grantors tax for roads.

Sen. John Watkins (R-Midlothian) and Delegate Dave Albo (R-Springfield) also filed 5 percent gas tax proposals.

Del. Mark Cole (R-Fredericksburg) says he wants to increase the share of sales and use tax revenue dedicated to the Transportation Trust Fund.

Americans for Prosperity, a fiscal-watch group, likes the Cole and Obenshain approaches because they do not involve tax increases.

‘Road Funds for Roads’

“We support making sure that the funds collected for roads are only used for transportation needs, not other pet projects. We will oppose attempts to adjust the gas tax to inflation,” AFP said in a statement.

Audrey Jackson, director of AFP’s Virginia chapter, expressed skepticism toward McDonnell’s newly announced list of road and rail projects that would be funded under his plan.

“I think this makes a great case that we need to prioritize spending so that these projects can be addressed, but why at the expense of the hardworking Virginians when Virginia has one of the largest budgets in her history?” Jackson asked. “If transportation is a priority, let’s make it a priority.”

Business Group Unsure

The National Federation of Independent Businesses is polling its 6,000 member companies in the state about which route to take on road funding.

“We feel no pressure to fall into line,” said Virginia Executive Director Nicole Riley, adding her group supports Obenshain’s lockbox amendment and opposes shuffling of funds away from transportation.

In a statement, Obenshain said, “If we’re talking about prioritizing transportation, we need to make sure that whatever monies are deposited in the Transportation Trust Fund aren’t raided to pay for unrelated programs, as has already happened three times.”

The senator and his staff declined to specify when such actions occurred, or how much money was “raided.”

Kenric Ward (kenric@watchdogvirginia.org) is Virginia bureau chief for Watchdog.org. Reprinted with permission of Watchdog.org.

Kenric Ward

Kenric Ward reports for watchdog.org. (read full bio)