Addressing a friendly audience this afternoon at the Commonwealth Transportation Board, Governor Bob McDonnell plugged his transportation financing plan, arguing that it was “economically sound, politically viable” and will “fix the problem.”
Tag: VDOT
McDonnell Pitches Tax Plan
Addressing a friendly audience this afternoon at the Commonwealth Transportation Board, Governor Bob McDonnell plugged his transportation financing plan, arguing that it was “economically sound, politically viable” and will “fix the problem.”
“Our problem is a math problem,” the governor said. “Revenues are on a downward path and the cost of asphalt is on an upward path.” Within a few years, $500 million a year will be diverted from the state’s construction fund to pay for maintenance.
“I’ve used every asset I can find” that the General Assembly has made available to him, McDonnell said. He has audited VDOT four times. He has issued bonds. He has tapped the General Fund budget surplus. He has leveraged state dollars through tolled Public Private Transportation projects. Now the options are exhausted and the state needs new revenue.
McDonnell has proposed a five-point plan: (1) scrapping the motor fuels tax (except on diesel) and boosting the sales tax by 0.8%, a revenue source that will increase as the economy grows; (2) diverting 0.25% of existing sales tax revenue from the General Fund to transportation; (3) charging an extra $15 per year for vehicle registrations; and (4) charging alternative-fuel vehicles $100 per year, and (5) collecting taxes on online sales.
As people shift to more fuel-efficient automobiles and alternate-fuel vehicles, the governor said, the gasoline tax is not a viable long-term revenue source. “Relying on the state gas tax will only make the funding situation worse because the gas tax buying power has greatly depleted over the years. Switching to the state sales tax is the reasonable and logical solution to fund projects.”
Underlining the governor’s remarks, John Lawson, chief financial officer of the Virginia Department of Transportation (VDOT) told the CTB that his five-year revenue forecast had become significantly more pessimistic over the past year. Compared to last year’s five year forecast (2013-2018), the amount of revenue available to VDOT over the next five years (2014-2019) is $766 million less. State revenue is expected to decline $218 million while federal revenue will plummet $548 million. Those numbers do not take into account added revenues from the governor’s tax plan, which, in enacted, would raise an estimated $1.8 billion over the same period.
Between direct funding reductions and a delay to bond issues, that means the state will have $700 million less to spend on new roads, bridges and highways than expected. Even previous to Lawson’s revelation, the McDonnell administration had been saying that the state would run out of state construction funding within four to five years.
Touting the sales tax component of his plan as a first for the country, McDonnell said. The sales tax “is predictable, it’s reliable and it grows.”
A wide array of business and labor groups have endorsed McDonnell’s plan, as have key Republican legislators. Democrats have been relatively quiet, although some have expressed concerns about the idea of siphoning money from the General Fund, which would come at the expense of schools, health care and other priorities. Conservatives have expressed suspicion of anything resembling a tax increase. Free-market advocates have argued that the shift away from the user-pays gas tax would subsidize driving. And smart growth advocates have slammed the bill for that reason and others.
Before approving another $1.8 billion in spending over the next five years, said Stewart Schwartz, executive director of the Coalition for Smarter Growth, in response to the governor’s remarks, the General Assembly should take a close look at how McDonnell is spending the $3 billion it authorized for to borrow. The U.S. 460 Connector between Suffolk and Petersburg, costing more than $1 billion in public dollars, has a very low cost-benefit ratio compared to projects going begging in other parts of the state, he said. What assurance is there, he asked, that new tax revenues won’t be similarly wasted?
Read the original story at Bacon’s Rebellion >>
Photo courtesy of James Bacon.
Washington Studies a VMT Tax. Where Is Virginia?
While Governor Bob McDonnell proposes to scrap the gasoline tax on the grounds that drivers are shifting to more fuel-efficient vehicles and alternate fuels, the state of Washington is heading in a very different direction — instituting a Vehicle Miles Traveled (VMT) tax. According to the Associated Press, a committee of transportation experts recently concluded that it was feasible to shift from gasoline taxes to a “pay as you go” road-fee system. A virtue of the tax is that it would treat drivers on an equitable basis, regardless of how much gasoline their cars burned. Washington is joining 18 other states in studying the alternative.
No Tax on Gasoline? A Terrible Policy for Transportation and our Economic Competitiveness
RICHMOND, VA — Governor McDonnell said yesterday, “That’s right, no more gas tax at the pump. No sales tax at the pump either.” “The Governor’s proposal to eliminate all state taxes on gasoline isn’t bold, it’s terrible policy,” said Stewart Schwartz, Executive Director of the Coalition for Smarter Growth. “It would send exactly the wrong market signal.
Virginia Governor Proposes Eliminating State Gasoline Tax
Virginia would become the first state in the country to eliminate its gasoline tax if a major transportation funding plan proposed by Governor Bob McDonnell (R) is approved by the General Assembly.
Revenue from the state gas tax of 17.5 cents per gallon, last raised by lawmakers in 1986, would be replaced by an increase in the state sales tax. That rate is currently 5 percent; the governor wants to raise it to 5.8 percent.
McDonnell’s proposal would also increase by half the portion of the sales tax already dedicated to road maintenance and operations. However, during the first three years, that tax would provide $300 million for the Silver Line rail project to Dulles International Airport — a $5.5 billion project that Virginia has funded only $150 million to date.
“Transportation is a core function of government. Children can’t get to school; parents waste too much time in traffic; and businesses can’t move their goods without an adequate and efficient transportation system,” said McDonnell at an afternoon news conference, flanked by members of the General Assembly who will dissect his sweeping proposals during the 45-day legislative session.
If lawmakers pass the governor’s entire plan, which also includes higher vehicles registration fees and a $100 charge on electric and natural gas vehicles, Virginia would receive more than $3 billion over five years to fund road construction and transit development, including intercity passenger rail.
A primary aim of the funding package is to stop the yearly transfer of construction dollars from the Commonwealth Transportation Fund to required maintenance projects, a process that will leave the fund empty by the end of the decade.
“My transportation funding and reform package is intended to address the short and long-term transportation funding needs of the Commonwealth. Declining funds for infrastructure maintenance, stagnant motor fuels tax revenues, increased demand for transit and passenger rail, and the growing cost of major infrastructure projects necessitate enhancing and restructuring the Commonwealth’s transportation program,” McDonnell said.
The governor has indicated in recent weeks that the state gasoline tax’s diminishing returns minimizes its effectiveness in raising new revenues. Higher vehicle fuel efficiency standards, among other factors, have eaten into the tax’s buying power. The 17.5 cents per gallon tax currently accounts for about one-third of the state’s transportation funding, although the tax has lost 55 percent of its purchasing power when adjusted for inflation since 1986, the last time it was raised.
Instead of raising the tax or pegging it to annual inflation adjustments, the governor wants to eliminate it, although the state diesel tax would remain in place. Virginia would then abandon a fundamental premise of transportation funding: motorists who use the roads pay for the roads in the form of taxes.
“If this were adopted it would mean there would be no relationship to the extent to which people use the transportation network and what they actually pay for it,” said Bob Chase, the president of the Northern Virginia Transportation Alliance, which favors road construction as a solution to traffic congestion.
“It’s a dramatic proposal to shift funding from the gas tax to the sales tax, and we’re going to have to look at what it means when you disconnect the tax from the actual use of the roadways,” said Stewart Schwartz, the executive director of the Coalition for Smarter Growth and frequent critic of the McDonnell administration’s funding priorities.
The General Assembly has for years evaded the responsiblity of injecting significant new tax revenue into transportation. While all observers agree the state’s needs total in the billions, there is no consensus on the best way forward. To Schwartz, prioritizing road construction amounts to squandering precious funds that could be used to develop public transit systems.
“Instead of addressing metropolitan area needs, the administration is spending $1.2 billion on Rt. 460, $200 to $400 million on the Charlottesville Bypass, and proposing to spend billions on the Coalfields Expressway and an estimated $2 billion on a Northern Virginia outer beltway,” he said.
Click here to read the original story on Transportation Nation.
Virginia Governor Bob McDonnell (photo via flickr)
McDonnell Proposes Higher Sales Tax To Replace Gas Tax
The governor unveiled a transportation plan that would eliminate the gas tax and the state sales tax and fees.
Virginia would become the first state to eliminate its gasoline tax if a major transportation funding plan proposed by Gov. Bob McDonnell is approved by the General Assembly.
To fund ongoing maintenance and new transportation projects, McDonnell is asking lawmakers to do away with the 17.5-cent state gas tax — which was last increased in 1986 — and replace it by raising the state sales tax from 5 to 5.8 percent.
The governor’s proposal also calls for increasing by 50 percent the amount of sales tax revenue already dedicated to transportation, mainly to fund road maintenance. During the first three years, however, that tax hike would provide $300 million for the Silver Line rail project — the $5.5 billion rail line to Dulles Airport that has only received $150 million in state funding thus far.
“My transportation funding and reform package is intended to address the short and long-term transportation funding needs of the Commonwealth,” McDonnell said during a press conference Tuesday. “Declining funds for infrastructure maintenance, stagnant motor fuels tax revenues, increased demand for transit and passenger rail, and the growing cost of major infrastructure projects necessitate enhancing and restructuring the Commonwealth’s transportation program.”
The gas tax, which currently accounts for about one-third of the state’s transportation fund, has lost 55 percent of its purchasing power when adjusted for inflation, McDonnell said.
The governor is also asking the General Assembly to approve a $15 increase in vehicle registration fees and a $100 charge to register an electric or natural gas car. McDonnell hopes to generate $844 million in annual new revenue by 2019 through these policies, which would mean $3.1 billion over the next five years for transportation projects.
“Those vehicles do not pay any gasoline tax, at the state or the federal level, but they use the roads the same amount as any other gasoline powered vehicle,” McDonnell says. “So it is an equitably change to ask alternative fuel vehicles to fund part of the infrastructure needs.”
A primary aim of the funding package is to stop the yearly transfer of construction dollars from the Commonwealth Transportation Fund to required maintenance projects, a process that will leave the fund empty by the end of the decade.
But McDonnell’s plan abandons a fundamental transportation funding premise: that those who use the roads pay for the roads in the form of taxes.
“It’s a dramatic proposal to shift funding from the gas tax to the sales tax, and we’re going to have to look at what it means when you disconnect the tax from the actual use of the roadways, and what signal that sends,”says Stewart Schwartz of the Coalition for Smarter Growth, which favors developing public transit instead of road building. “We will also have to look at whether this generates sufficient money for the transit needs of the state.”
Advocates of new roads and highways are also concerned about the possible elimination of the gas tax.
“If this were adopted, it would mean there would be no relationship to the extent to which people use the transportation network and what they actually pay for it,” says Bob Chase of the Northern Virginia Transportation Alliance, which advocates road building.
McDonnell’s plan also includes a constitutional amendment creating a constitutional requirement on transportation funding, which would have to be approved by voters. But the General Assembly has for years avoided injecting significant new tax revenue into transportation. While many agree the state needs billions of dollars of investment, there has been no consensus on the best way forward.
Click here to read the original story on WAMU.
Photo Courtesy of Amando Trull
Last Day for Input on 2012 Study on Dulles Bi-County Corridor
Jan. 2, 2013 is the last day for citizens to voice their opinions on the new Bi-County, formerly Tri-County North/South Dulles Corridor, for a 2012 General Assembly report. Northern Virginia Transportation Alliance, a nonprofit group of business people and residents within Northern Virginia, recommends residents demonstrate their support for the corridor by sending a message to Governor McDonnell. “The North/South Corridor is critical to the future of Dulles Airport, and the future of Dulles Airport is critical to Northern Virginia and the entire Commonwealth,” said Bob Chase, President of NVTA.
Comments on Proposed “North-South Corridor of Statewide Significance” (aka the Outer Beltway)
On behalf of the Coalition for Smarter Growth, I wish to register our strongest objections to the conduct of the “North-South Corridor of Statewide Significance (COSS)” study and to the very concept of the proposal. Our first objection is to the lack of transparency and seriously inadequate public involvement and notice that have characterized this proposal from the outset, including…
Plans for Loudoun-Prince William highway move forward; crossing to Md. under discussion
The major North-South highway that is being planned for Loudoun and Prince William counties got a public rollout of sorts last week. “Open houses” were held at Stone Bridge High School in Ashburn and the Four Points Sheraton in Manassas. There were no formal presentations for this new “Northern Virginia North-South Corridor,” just a series ofinformational boards that showed roughly where the limited-access highway would go and why local and state officials think it’s needed.
This is not just the previously discussed Tri-County Parkway between I-66 and Route 50. This is the whole enchilada: a 45-mile limited-access highway from Route 7 in Ashburn all the way to I-95 in Dumfries. And the discussion is now officially beginning about extending this road across the Potomac River into Maryland, which makes the warnings from environmental and smart-growth groups of an emerging “Outer Beltway” connecting with the Intercounty Connector and then I-95 in Maryland seem more plausible.
VDOT Plays the Grinch for Northern Virginia Residents
With less than two weeks notice, the Virginia Department of Transportation (VDOT) scheduled two public meetings this week on their “North-South Corridor of Statewide Significance,” a revival of the long-controversial Outer Beltway. Not only are the meetings set amid the busy holiday season when it’s hard for local residents to attend, but the comment period is scheduled to close on January 2nd, the day after the long holiday week — a time guaranteed to ensure that few people will have the time to comment.
Moreover, the meeting notice cannot be found on the main VDOT website, but is instead on a little known VTRANS website and the meetings will not be conducted in an open public hearing format.