The transportation funding package passed by the General Assembly last weekend has drawn criticism from both ends of the political spectrum.

But the plan is getting praised by one of three key Wall Street credit rating agencies.

In its weekly credit outlook published Thursday, Moody’s Investors Service said the Virginia transportation package  is “credit positive.” The state has a Aaa rating with a negative outlook from Moody’s.

The transportation package is worth $3.5 billion statewide over five years, with regional provisions that could produce another $2.6 billion for Northern Virginia and Hampton Roads.

Moody’s senior analyst Lisa Heller wrote that the legislation makes Virginia ” the first state to address stagnant gas
tax collections that have been increasingly insufficient to meet transportation funding needs, a problem faced by many states as they, consumers and automakers embrace higher fuel efficiency standards. These forces, combined with the fact that Virginia’s motor fuel tax rate did not adjust to inflation, have translated into flat revenues over the last ten years.”

Heller went on to note that transportation package “was passed at a time when Virginia’s economy is highly exposed to federal downsizing. Defense cuts included in sequestration in particular would have an adverse impact on the
commonwealth and its ability to address its transportation needs.”

Gov. Bob McDonnell and his legislative allies on the transportation bill have been taking heat from some Republicans, anti-tax activists and conservative pundits (here’s a take from Steve Moore of the Wall Street Journal). But McDonnell hailed the Moody’s report as validation of the bipartisan effort to pass the legislation.

“This is yet another demonstration of why it was so critical that we finally, after 27 years of inaction, come together in Richmond to get a long-term transportation funding plan passed,” McDonnell said in a news release. “Transportation is crucial to job creation, and it is crucial to the quality of life of our citizens. The failure to properly fund transportation was hurting Virginia’s economic competitiveness, it was hurting our citizens ability to find good paying jobs, and it was imperiling Virginia’s critically important credit rating. Today’s report from Moody’s is good news for Virginians. We are working to make Virginia a jobs-magnet and that can’t happen without a modern and well-funded transportation system. I thank all those who have worked so hard to get this legislation passed, it was long overdue, and it is having a positive impact on our Commonwealth already.”

– Michael Sluss