Wait, What’s Going on With Transportation?

Va House Speaker Bill Howell introduces Gov. McDonnell's transportation package

Va House Speaker Bill Howell introduces Gov. McDonnell’s transportation package

The Virginia General Assembly moves pretty fast, leaving citizens with many concerns about what is happening with transportation. Despite the extensive media coverage, the details keep changing and many Virginians aren’t quite sure of the details lawmakers are proposing and debating. To help educate everyone about what’s going on, I’m summarizing the most recent developments and policy concerns.

Transportation is deeply connected to housing and we have to ask some serious questions about the current transportation proposal moving through the Virginia legislature. We know that the lack of affordable housing has forced Virginians to live farther away from their jobs which adds more congestion on our roads. We need a 21st century transportation solution.

Gov. Bob McDonnell has put forward a transportation proposal which  basically:

  • Raises the sales tax
  • Permanently diverts more of the sales tax away from the General Fund (which also funds core services like education and health care) toward transportation
  • Eliminates the gas tax
  • Increases some transportation related fees, such as a fee on hybrids

Many legislators also put forward transportation proposals. Some were similar to the Governor’s, some were very different.

Gov. McDonnell’s proposal was introduced in the House of Delegates by Speaker Bill Howell and in the State Senate by Senator Steve Newman. Both of these bills advanced out of their respective Finance Committees and are heading to the full House & Senate floor. The Speaker’s bill will definitely pass the House Floor without any changes.

The Senate version passed the Senate Finance Committee on a strict party line vote of 10 – 5 this past Thursday and is headed to the full Senate.

One strength of the Governor’s proposal is his serious effort to raise new revenue to address our transportation needs. However, there are many critiques of his proposal. For example:

  1. Eliminating the gas tax means people who use mass transit, bike, carpool, or drive less are subsidizing people to drive more. It also means that out of state drivers get to use Virginia’s roads for free/dramatically less (they may still pay sales tax if they stop and shop in Virginia)
  2. Permanently diverting money from the General Fund could have a serious negative impact on public education. Virginia is a growing state, and permanently reducing how much money is available in the General Fund for education, among other things, is definitely going to cause a problem.
  3. Raising the sales tax has a disproportionate impact on low & moderate income Virginians. This could be remedied by making the Earned Income Tax Credit refundable in Virginia.
  4. The proposal only addresses the shortfall for maintenance. We won’t have enough money for new construction or investments in new solutions like mass transit.
  5. Much of the revenue depends on the passage of legislation by Congress, which is not certain.

It is important to get some of these details right because everyone will pay more in taxes yet the transportation problem will not be solved. Legislators will have taken a hard vote and there will be little political will to come back and address revenues for new construction.

So what happens now? The Senate bill will go to the Senate floor where there is a 20-20 split between Democrats and Republicans with Lt. Gov. Bill Bolling as the tie breaking vote. The bill could get amended on the Senate floor, but it’s unclear how heavily it will be changed. The bill was already amended slightly in the Senate subcommittee.

The real work of compromise and change will most likely happen behind closed doors when the House bill and the Senate bill go to conference.

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