Delegate Mark Keam - Virginia's 35th House District

Transportation Still Alive!

Dear Friend,

In my last (very long!) email to you, I described Governor Bob McDonnell's transportation funding proposal in detail. I also explained to you why I did not support that bill when it came to the floor for a vote.

Well, quite a lot has happened since last week when I sent you that email.

First, on Tuesday, the Senate took up House Bill 2313 in the Senate Finance Committee, but amended it in significant ways.

The Gasoline Taxsize=3>

Instead of eliminating the 17.5 cents per gallon of gasoline tax as the Governor proposed, the Senate amendment increases it by 5 cents (to 22.5 cents) and indexes it to inflation so the amount would rise automatically depending on the economy. This change is expected to raise about $450 million per year.

In addition to keeping the gas tax and increasing it, the Senate amendment would also add a new 1% tax on the sale of gasoline at the wholesale price, which would result in roughly about another 3.4 cents per gallon that would come into the state as transportation revenues. This change is expected to raise an additional $400 million per year.

Sales Tax Increasesize=3>

Instead of raising the sales tax across all of Virginia by 0.8 cent from 5 to 5.8 cents per dollar as the Governor proposed, the Senate amendment would authorize any county or city to enact up to a 1% new local sales tax to pay for transportation.

If all the local jurisdictions in Northern Virginia were to adopt this provision to raise their sales tax, it is expected to raise about $370 million per year which will remain in Northern Virginia.

Dulles Metro Expansionsize=3>

Similar to the Governor's proposal, the Senate amendment would raise the vehicle registration fee by $15 per car. But instead of allocating all of the new funds to pay for intercity passenger rail and transit as the Governor's bill would do, the Senate amendment would split this new revenue between transit and Phase 2 of the Dulles Metrorail expansion project.

Alternative Fuel Vehicle Feesize=3>

Unlike the Governor's proposal, the Senate amendment does not impose any new fees on alternative fuel vehicles. This provision was already deleted on the floor of the House, and the Senate kept it out of this bill.

Internet Sales Taxsize=3>

Finally, unlike the Governor's proposal, the Senate amendment does not rely blindly on any phantom moneys that may come into Virginia based on whether Congress passes the "Marketplace Equity Act," which would allow states to collect out-of-state sales taxes on purchases made online. Instead, it would use some of this new revenues -- if available -- to pay for both transporation and education needs.

The Senate amendment does, however, require that, should Congress not pass this bill into law by July of 2014, Virginia would add an extra 1% tax to the wholesale price of gasoline, in addition to the new 1% tax that was described above, to make up for any deficiencies in general fund revenues that may have been met by the Marketplace Equity Act.

Current Status of the Bill size=3>

The amended House Bill 2313 came out of the Senate Finance Committee on a 9-6 bipartisan vote: 3 Republicans and 6 Democrats voted for the bill, and 6 Republicans voted against.

The bill was debated on the Senate floor on Wednesday, and with a minor amendment, it passed on a 26-14 bipartisan vote: 6 Republicans joined all 20 Democrats in voting for the bill, although 2 Republicans noted after the vote that they intended to vote no.

The bill then came back to the House floor last night, and on a procedural vote to accept or reject the Senate amendments, the House prevailed on a 78-19 vote. This vote forces the bill to go into a House and Senate "conference." The conferees were given until midnight of this Saturday, February 16, to complete their negotiations and return a conference report (essentially a new compromise bill) to both chambers.

Last night, House Speaker appointed 4 Republicans and 1 Democrat to negotiate from the House side, and the Senate appointed the same ratio. Interestingly, among the 10 conferees, 2 are from Northern Virginia, 3 are from Hampton Roads, 3 are from Central region, and 2 are from the rural areas.

While it is difficult to read too much into these members' geographic backgrounds, it appears at least on the surface that every region of the Commonwealth is represented on the conference.

As I reported last week, I voted against the House version of the Governor's proposal as I thought it would be a mistake to get rid of the gas tax.

I prefer the Senate amendments to the original House bill, but I also believe that the revised proposal does not raise enough new revenues to meet our needs.

Experts have indicated that Northern Virginia alone needs roughly $1 billion per year just to pay for all of our maintenance and new construction needs. If we consider the rest of the state and add various mass transit and public transportation needs, the total amount of new revenues needed is closer to $3 billion per year.

Yet, even with the changes, the Senate version of the Governor's bill would raise only about $850 million for the entire state plus an additional $370 million for Northern Virginia. I am hopeful that the conference between the House and Senate will result in a good bill that meets as much of our Northern Virginia needs as possible.

That is why, even though the Senate version is much more preferable to the House version, I voted to send both bills into conference (by the way, click here if you want to understand the complex legislative process of this bill and see how we voted at various stages of this entire ordeal!) .

The next news to break on this bill will be sometime this weekend when the conferees meet their deadline. I will keep you updated on the progress of this and any other issues that may be of interest to you. In the meantime, please feel free to call or email me at any time with any question you might have.


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