The Senate sponsor of Gov. Bob McDonnell’s transportation funding bill has filed a revamped version of the legislation that, among other things, would drop a proposed increase in the state’s retails sales tax and instead apply a 5.5 percent tax to the wholesale price of gasoline.
Sen. Steve Newman, R-Lynchburg, circulated the substitute bill this afternoon, one day before the politically divided Senate will vote on one of the biggest issues of the 2013 General Assembly session.
Newman, the chairman of the Senate Transportation Committee, has proposed scrapping McDonnell’s proposals to increase the sales tax from 5 percent to 5.8 percent , increase vehicle registration fees by $15 and impose a $100 annual fee on hybrid and alternative fuel vehicles. Newman’s substitute plan would impose a 5.5 percent sales tax on the wholesale price of gasoline, which would replace the 17.5 cents per gallon excise tax that is now levied at the pump.
“It doesn’t raise quite as much as the governor’s bill, but I think the governor’s bill always would have lost the fees, and that would have brought it much closer to what this bill would end up being,” Newman said.
Newman said the fees had “become problematic for the left and the right.” And, he said, “keeping the nexus with gasoline” appears to be important to senators in both parties.
McDonnell spokesman Tucker Martin said the governor is “always happy to welcome new ideas to the transportation conversation,” but noted that McDonnell’s plan “is the broad funding package our transportation system needs to be sustainable in the years ahead.”
The House of Delegates is scheduled to debate the governor’s transportation plan later today.
Attorney General Ken Cuccinelli, the presumptive Republican nominee for governor, endorsed Newman’s plan this afternoon, calling it the “best chance to get the votes needed to make improvements to Virginia’s transportation system.”
Newman said his proposal initially would be revenue neutral, but the sales tax on gasoline would grow with inflation and gradually reduce the need for the state to divert highway construction funds for maintenance needs.
But Newman’s revisions may not be enough to get 21 votes in the chamber, said Senate Democratic Leader Richard Saslaw, D-Fairfax County.
“None of that’s going anywhere,” Saslaw said flatly.
Newman’s plan would generate as much as $477.6 million for state transportation annually by 2018 and nearly $2 billion over the next five years, according to a summary circulated this afternoon. That’s less revenue than McDonnell’s proposal, which will generate an estimated $3.1 billion over five years.
But both plans count revenue that the state could generate only if Congress passed legislation that would give states greater ability to compel online retailers to collect state sales taxes. McDonnell projects that Virginia could collect $1.02 billion for transportation over five years if the act is passed.
– Michael Sluss