Government Affairs

General Assembly Update

January 15, 2008

PROTECT TRANSPORTATION FUNDS

There is growing sentiment to repeal the “abusive driver” fees passed by the General Assembly in 2007. In his State of the Commonwealth Address, the Governor said the fees were a part of the transportation funding package that was clearly “not working.“ There have been almost a dozen bills introduced in the General Assembly to repeal the fees.

The revenue generated by those fees was earmarked for maintenance and is critical to both the maintenance and construction programs. The loss of that revenue would mean more that $300 million less for the maintenance program over the next six years. That loss would have to be made up by transferring even more money from the construction program to the maintenance program. In 2008 VDOT will transfer more that $250 million from the construction program just to meet basic maintenance needs. Without the fees, that number would be well over $300 million a year.

When politicians first started talking about repealing the fees, many did not address replacing those revenues, saying instead that the revenue generated by the fees was not a significant part of the funding package.

Fortunately, in just the last few days, more and more legislators, and even the Governor, have begun talking about “replacing” the lost revenues from the repeal of the “abusive driver” fees and fixing the maintenance funding shortfall. Ideas being floated include:

• Increasing the gas tax. One penny in gas tax raises about $50 million a year and costs the average Virginia driver $0.50 a month! In addition, gas taxes make out-of-state drivers pay their share of maintenance costs.
• Removing part or all of the sales tax exemption on auto sales. Currently, there is only a 3% sales tax (called the “titling tax”) on autos. Raising that by even 1% would generate hundreds of millions for maintenance.
• Repealing the sales tax exemption on gasoline. Currently, there is no sales tax on gasoline. Removing that exemption would raise hundreds of millions for highway maintenance.

Several bills have been introduced that would address the maintenance funding shortfall.

It is time to let your legislator know that the “abusive driver” fees should not be repealed unless there is replacement revenue stream. Let them know you support full funding of the Commonwealth’s maintenance needs.

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