Dear Fellow Virginians,
Well, now we know the tax hikes for sure! The House/Senate Transportation Bill (HB 2313) Conference Committee brought both bodies their Conference Report today. I intend to vote NO on final passage. Please contact your delegate/senator today and urge them to vote no. The bill includes the following tax increases:
- Replace the current 17.5 cents per gallon flat tax on gasoline with a 3.5 % wholesale sales tax paid by distributors, which will be passed on to consumers, and a 6 % wholesale sales tax on diesel fuel.
- Increase the 5% retail sales and use tax paid statewide on most purchases to 6% in Northern Virginia and Hampton Roads and 5.3 % in the rest of the state.
- Apply a $100 annual fee on alternative fuel vehicles, including hybrids.
- Increase the current 3% sales tax paid on the purchase of motor vehicles to 4%.
- Increase the amount of general fund money diverted to fund transportation from .50 % to .675 %, raising roughly $200 million when fully phased in.
- The sales tax in Northern Virginia and Hampton Roads will be 6% instead of the 5.3% in the rest of the state.
- In Northern Virginia there will be an increase of 40 cents per hundred dollars on the sale of a house. That’s an extra $1600 on the sale of a $400,000 home.
- Also in Northern Virginia there will be a 2 % occupancy tax for hotels.
If Congress passes the Marketplace Equity Act (which requires on line businesses to collect sales taxes) the proceeds will be distributed as follows: 55.55% for schools; 22.2% for local governments with no restrictions; and 22.2% for roads and transit. If Congress does not pass the Internet sales tax collections act, an additional 1.6 % tax would be added to the wholesale gas tax. Not all of the sales tax increase (the extra .3% statewide or extra 1% in Northern Virginia & Hampton Roads) will go to transportation. Part will go to schools and other general fund programs. There is no prohibition from using more of the tax increase for things other than transportation, nor anything to stop reinstating the gas tax on top of all the other taxes in future!
NOT FIXING WHAT IS BROKEN: In this session, the House of Delegates: Rejected an attempt to increase representation of Northern Virginia and Hampton Roads on the Commonwealth Transportation Board, the VDOT agency that decides which projects are funded. The current CTB is weighted in favor of districts drawn from the 1930’s. Agreed to fund two roads which proponents hope will spur economic development: (A) $1.4 Billion for a 55 mile toll road parallel to existing Rt. 460 (Suffolk to Prince George), a project which VDOT says will create 4,000 jobs but lists no traffic counts; (B) Increase by $554 million for a total of $1.3 Billion to finish and four lane Rt. 58 to the intersection of I-77/I-81, a road that carries only 7900 cars daily.
Declined to alter the decades old transportation funding formula for the allocation of money to VDOT construction districts. This will perpetuate the practice of funding rural rather than urban areas. Apparently, if rural law makers vote for these higher taxes, they have been assured that no change will occur to the funding formula.
Thank you for your diligence!
Delegate Bob Marshall