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McDonnell couldn’t resist the call of the tax protesters in amending the transportation package — but in terms of new revenue, it survives.
Wednesday, March 27, 2013
A little tap-tap here, another there . . . the sound issuing from the governor’s office late Monday was Gov. Bob McDonnell chipping away at his legacy. And for what?
To respond to the pleadings of special interests unhappy about getting hit up for more tax revenue to help narrow a gap between Virginia’s transportation needs and the money required to meet them.
An increase in the vehicle titling fee? McDonnell heard from car dealers complaining this would hurt sales. So he proposes to lower the 4.3 percent tax rate lawmakers put in their transportation package to 4.15 percent.
A 3 percent hotel occupancy tax in gridlocked Northern Virginia? Why, that would put it “near or above” the rate in nearby out-of-state jurisdictions. The governor proposes to lower it to 2 percent.
Both industries rely heavily on a seriously inadequate highway system in much of the commonwealth.
The General Assembly’s carefully constructed compromise promises to end two decades of denial that Virginia needs to replace eroding transportation revenue with a source that will grow with the state — if, that is, the state’s economy is to continue to grow. Should any of the changes McDonnell wants to make endanger that delicate deal? Of course not.
But lawmakers, who tore apart the governor’s initial transportation funding proposal and put together a better plan, should feel free to ignore his tax tinkerings.
McDonnell did retain an annual fee on alternative fuel vehicles, but lowered it to $64 from $100. This ensures equity, his office explained: Since the budget lawmakers passed lowered taxes on gasoline, the $100 hybrid fee should be adjusted downward.
Huh? The governor proposed the new $100 hybrid fee for road maintenance at the same time he sought to eliminate the state excise tax on gasoline in favor of a higher sales tax — adding one user tax, while swapping out the other for a general tax increase. Which made no sense.
The General Assembly might see a need to adjust the annual fee in the interest of fairness, but lawmakers should keep in mind the governor’s concern comes late in the game, and only after hybrid owners howled in protest.
All of that said, McDonnell has done a service to the commonwealth in making transportation funding a priority at considerable cost to his standing, at least in the short term, among the immovable fiscal hard-liners in his own Republican Party.
He likely will find them implacable, if his amendments are meant to placate.
It has parts for every partisan to hate. Even with his amendments, the governor has signed on to a bill that will deliver new dollars to the revenue-starved transportation system and grow with inflation. That’s the bottom line Virginia needs to see.
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