VA lawmakers OK tax-raising transportation bill

By Kathryn Watson | Watchdog.org Virginia Bureau

ALEXANDRIA — Virginia taxpayers, get ready to pay more — a lot more.

The Virginia House of Delegates swiftly passed a controversial compromise on transportation Friday, giving the public only minutes to review the 128-page conference report on a bill that will raise taxes by an estimated $6 billion over five years.

The Senate, which had yet to vote as of 4:20 p.m. Friday, has through Saturday to do so.

The bill, made available online to the public minutes before the House of Delegates voted for it 60-40 early Friday afternoon, nixes the 17.5 cents-per-gallon gas tax and increases a laundry list of other taxes to yield $3.5 billion over the next five years for road maintenance, highway construction, light rail and trains.

Here’s the gist of the bill’s tax changes:

• Nixes the 17.5-cents-per-gallon gas tax, replacing it with a 3.5 percent wholesale sales tax on regular gas and 6 percent wholesale sales tax on diesel.
• Increases the state sales tax from 5 to 5.3 percent, diverting the difference to transportation.
• Increases the personal property tax from 3.5 to 4.3 percent.
• Increases the vending machine sales tax from 4.5 to 6 percent in Northern Virginia and Hampton Roads, 5.3 percent in other parts of the state.
• Adds a 3-percent hotel tax in Northern Virginia.
• Increases the heavy equipment tax from 3.5 to 4.3 percent.
• Increases sales tax on purchasing vehicles like trucks and cars from the current 3 percent to 4.3 percent by 2016.
• Charges a $100 annual fee on all alternative-fuel vehicles, hybrids included.

“It’s really unfortunate that all of us, all of us Virginia taxpayers, are going to be left holding this bill, this revenue increase I think of $6.1 billion, and we weren’t able to read it before it was passed,” said Audrey Jackson, Virginia director for the right-leaning Americans for Prosperity. “The Richmond legislators really took a lesson from the legislators in Washington, and starting to behave like they are. And that’s unfortunate.”

That’s exactly the message Republican Delegate Bob Marshall, one of two delegates to speak against the bill in Friday’s debate, shared as he disparaged his colleagues for ramming through a bill seen ahead of time only by a select few.

“All the citizens are flying blind, but if you’re a lobbyist, you’re fine,” the Prince William lawmaker said, calling the bill a bunch of “legal-eze.”

Republican and Democratic delegates alike justified the tax increases and imperfections in the bill by dubbing the state’s road maintenance and congestion-relief needs desperate and urgent.

“I do think this is our last shot for a long time,” said Delegate David Toscano of Charlottesville, the House Democratic leader.

All 100 delegates are up for re-election in November, and McDonnell has just months left in office.

Delegate Tag Greason, R-Landsdowne, who voted in favor of the bill, said that when he first came to Richmond in 2010, he planned to never raise taxes.

He changed his mind.

“But as I think about where we are today … I think to myself I was also sent here to solve problems,” said Greason, adding that the bill isn’t really about the “details.”

Delegate Onzlee Ware, a Roanoke Democratwho was one of the 10 members of the House and Senate transportation conference group that came up with the latest version of the bill, said compromise is painful for everyone involved.

“There are times in life that you have to look beyond yourself and look at the whole,” Ware told his colleagues before voting in favor of the bill. “And that’s what governing is.”

Jackson said taxpayers have lost this battle, but the fight isn’t over yet.

“We’re going to do our best to put some pressure on Governor McDonnell to ask him to amend and see if we can get some additional reform added to the legislation, because this is a major tax increase,” Jackson said.

Email Kathryn Watson at katie@watchdogvirginia.org