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Government Affairs

General Assembly Update

March 8, 2012


The House and Senate continue to spar over the passage of a budget before the General Assembly is scheduled to adjourn this Saturday. Yesterday, the Senate Democrats made public a letter to the Governor outlining their “demands” in order to support a budget resolution. NOTE: indexing the gas tax as opposed to taking money from general funds is one of their demands.  Read the full letter.

The Senate and the House of Delegates remain sharply divided over how to pay for maintaining and improving Virginia’s overburdened road network. HB 1248 and SB 639 (the Omnibus Transportation bills) took very different paths in the House and Senate. Both the Senate and House agree on removing the creation of a new tolling authority. The House version still has intact the Governor’s proposal to increase funding for transportation by moving, over a seven year period) ¼ of a percent of the sales tax revenues from the general fund to transportation. The Senate has rejected this idea, substituting a gas tax indexing provision instead. The House version keeps the study on devolution, the Senate version strips it out.

The Senate plan also removes the sunset clause from local income tax option of up to 1% for Northern Virginia, Norfolk and Virginia Beach and authorizes localities to withdraw from state secondary road program and impose a local meals tax. In addition the Senate version deletes: Re-direction of 1% of future general fund revenue growth over 8% to transportation; Transportation Improvement Districts where portion of economic growth is dedicated to transportation; Naming rights for transportation facilities.

Conferees have been unable to reach a compromise. The two sticking points are funding (indexing vs. general funds) and removing the sunset clause from local income tax option. A very real possibility is that the sides will not agree and we will have no transportation bill.

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