Virginia GOP Transportation Agreement

By: Philip Stewart Email
By: Philip Stewart Email

January 18, 2006

There was some big news from Richmond late Thursday afternoon on arguably the state's biggest issue, transportation.

Republican legislators announced a compromise transportation reform package Thursday.

It included nearly $1.4 billion yearly in state and regional funds and $2 billion in debt.

The GOP agreement comes after two weeks of private talks.

Among other things, the money will come from bonds, drastically higher fines against dangerous drivers, and increased car registration fees.

The agreement also allows areas like Hampton Roads and Northern Virginia to raise hundreds of millions more through other regional taxes.

"This is absolutely movement in a good direction," said Sean O'Brien, the Executive Director of the Sorensen Institute. "The fact that the republicans have spent the past couple of weeks talking amongst themselves and coming up with something that they think can be a workable solution, is good news for Virginia. This may not be the solution that takes up through the next ten years, but it will be nice to have something that carries us through a couple of years," he said.

Speaker Howell added that he was confident a "strong majority can agree" with most of the compromise.

But the agreement does not include Governor Kaine's proposal to boost sales tax on cars.

Shortly after the news of the agreement, Kaine released a statement saying, "we have some concerns about the elements of this proposal, but I recognize this is an early, and significant step in the legislative process."

Where the money will come from:

-Designates $250 million annually from the state's general fund - revenues traditionally reserved to pay such state obligations as public schools, health care and public safety.

-Dedicates half of the state's 2008 projected $545 million general fund surplus - $227 million - and about $64 million in subsequent years to transportation.

-Increases the fee to register a vehicle by $10, generating $71 million annually.

-Boosts fines on habitually bad drivers, generating $61 million annually.

-Increases the penalties on overweight trucks and the registration for heavy trucks, generating $30 million annually.

-Boosts the per-gallon tax on diesel fuel 16 cents per gallon to 17.5 cents, generating $20 million annually.

-Uses $339 million budgeted but not appropriated in 2006 for transportation.

-Authorizes $1.3 billion in new bonds for transportation projects from 2008 through 2012; then sanctions $700 million in bonds after that.

-Dedicates one-third of the insurance premium tax to pay off "FRANs," or federal revenue anticipation notes - debt the state issued to be repaid later from federal transportation funds.


Northern Virginia

Five counties and four cities together could raise $383 million annually by:

-increasing the commercial real estate assessment to 28 cents per $100, generating $275 million

-increasing the amount paid when a house is sold to 40 cents per
$100, generating $95 million

-increasing by 2 percent the fee on rental cars, generating $8

-charging a $100 fee to get a driver's license for the first

Hampton Roads

Sixteen localities in Hampton Roads together could raise $209
million annually by:

-increasing the commercial real estate assessment to 30 cents per $100 in value, generating $60.9 million

-increasing by 1 percent the fee for first-time vehicle registration, generating $41 million

-increasing the "grantors tax" paid on real estate transactions to 40 cents, generating $33.2 million

-increasing the fee for a driver's license by $20, generating $21.2 million

-increasing the fee on vehicle inspections by $10, generating $14.6 million

-increasing the registration on vehicles by $10, generating $13 million.

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