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After Objections, Va. Gov Amends Two-Tiered Transpo Funding Plan

Tuesday, March 26, 2013 - 04:19 PM

(Michael Pope -- WAMU) Virginia Governor Bob McDonnell has offered a compromise on his transportation funding plan in response to a legal objection by the state's attorney general. Virginia needs new and additional revenue for upkeep it's network of highways (about 58,000-miles worth) and mass transit systems. As cars get more fuel efficient, gas tax revenues are falling in many states.

McDonnel has already signed a bill that replaces the state's 17.5 cents-per-gallon retail gasoline tax with a 3.5 percent wholesale tax on gasoline and a 6 percent levy on diesel fuel. That won't change. The portion of the plan under scrutiny involves sales tax.

Virginia attorney General Ken Cuccinelli had raised concerns about a provision that would have levied higher taxes on some more densely populated areas, including Northern Virginia.

The bill members of the General Assembly sent to the Governor's Mansion had a long list of localities from Northern Virginia and Hampton Roads that would have been subject to a higher sales tax rate. The two-tier tax system was intended to raise money for road building, but Cuccinelli said it may have been unconstitutional.

Now the governor has a fix: ditch the parts about the two urban areas and extend the taxing authority to the entire state. McDonnell is sending an amendment back to the General Assembly that would create regional taxing authority to all 21 of the commonwealth's regional planning districts — two of which are Northern Virginia and Hampton Roads.

That means the other 19 districts could create taxing authorities for transportation dollars if they wanted to, but they don't have to.

The governor's amendments also cut the controversial $100 fee on hybrid cars to $64 a year, cut taxes paid on hotel stays, and reduced the titling tax on vehicle purchases.

McDonnell's 52 amendments will be considered by the General Assembly in a veto session April 3rd.

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