With no debate, the state Senate this afternoon passed an overhauled version of Gov. Bob McDonnell’s transportation funding package, setting up negotiations with the House of Delegates on a long-range plan to fund the state’s road, rail and transit needs.

The Senate voted 26-14 to pass a bill that would increase the gasoline tax by 5 cents per gallon, impose a 1 percent tax on the wholesale price of gas, and increase vehicle registration fees. The Senate plan is a substitute for a bill (House Bill 2313) the House passed last week. The House will formally reject the Senate plan later today, and the two chambers will appoint negotiators to reconcile differences between the plans.

The House bill closely resembles the plan McDonnell unveiled last month. Among other things, it would eliminate the state’s 17.5 cents per gallon gas tax and increase the sales tax from 5 percent to 5.8 percent.

The House plan would generate about $3.1 billion in transportation revenue over five years. The Senate alternative would produce an estimated $4.5 billion.

The Senate plan would keep the retail sales tax rate at 5 percent and increase the share of the tax that is dedicated to transportation from 0.5 percent to 0.55 percent. McDonnell wants to gradually increase that share to 0.75 percent over five years.

“Achieving our collective goal will require finding common ground,” McDonnell said in a statement after the Senate vote.  “That common ground must include a significant commitment of the projected future growth in general fund revenues, greater reliance on sustainable revenue sources which grow with economic activity, as opposed to gasoline tax increases, and sufficient revenues to address maintenance crossover, construction, passenger rail, and transit needs without over burdening our citizens and businesses with taxes.”

 – Michael Sluss