BREAKING: Virginia Senate Passes Transportation Deal 25-15


    I’m watching the debate on the Virginia transportation compromise now. Numerous Senators, both Democrats and Republicans, have stood up and talked about how it isn’t a perfect bill but it’s the “only solution we could come up with,” and that it will help the Commonwealth move forward. In his speech, Senate Democratic leader Dick Saslaw said that the keys to his support are the overall revenue increases and the “regional packages,” which are “desperately needed” in NOVA and Hampton Roads. Senator Barbara Favola (D-Arlington) argued that the bill is “not perfect,” but that we shouldn’t “let the perfect be the enemy of the good,” and that “this is a good plan,” with a “dedicated source of revenue,” with a “real infusion of dollars” to transit, including Metro to Dulles (and that “this is a big deal”). Favola added that since money raised regionally will fund projects within the region. Sen. Donald McEachin emphasized the need for “compromise,” said he agreed with Senators Ebbin and Petersen, but that no better bill is possible today and this will help the transportation situation in Virginia, so he’ll be supporting it.

    In announcing his opposition, Senator Chap Petersen stated that the bill was internally contradictory, overly complex (for no good reason), that it wasn’t fair for his constituents to pay higher taxes simply because they live in northern Virginia, and that we should NOT divide up Virginia into areas with higher and lower tax rates. However, Senator Petersen noted that he’s highly likely to be in the minority, and (half jokingly?) noted that if this vote means he’s digging his political grave, then at least “something good will have come out of it.” Senator Adam Ebbin said it “wasn’t an easy decision,” but in the end it’s “bad economics and bad transportation policy,” a “bitter pill.” Why are we, for instance, penalizing people who own clean energy cars instead of incentivizing them? That makes no sense, in Ebbin’s view (and of course he’s right!). Why are we not raising the gas tax to fund transportation? “This bill hurts the people who can least afford it…Virginians should not be forced to pay a higher tax for the clothes on their backs than at the gas pumps…I’ll be voting no.”

    Bottom line: I’m told that the Senate WILL pass the bill in a few minutes.

    Regarding Medicaid, see here for Julian Walker’s reporting that “Key legislative leaders said this afternoon they have a legal way around the constitutional questions raised about Medicaid expansion by Attorney General Ken Cuccinelli.” So…it appears they may have nailed down a deal to expand Medicaid in the overall context of cutting the transportation deal. Ahh…”sausage making,” isn’t it grand? Yeah, definitely don’t want to watch it, but that’s how government often works.

    UPDATE: Here’s a photo of the vote tally. Note that the only three Democrats who voted no were Senators Petersen, Marsh and Ebbin. Republicans voting no were Black, Garrett, Hanger, Martin, McDougle, Newman, Obenshain, Reeves, Smith, Stanley, Stuart and Vogel.


      Leesburg – Democratic Attorney General candidate State Senator Mark Herring (Loudoun & Fairfax) released this statement following the Senate’s passage of a statewide transportation funding plan:

      “Today the Senate passed a compromise transportation plan put together by members of both parties in the House and Senate, as well as Governor McDonnell. This plan will significantly increase the amount of money dedicated to improving Virginia’s transportation infrastructure.

      “I voted in favor of this plan because it will provide nearly $900 million annually in new revenue for transportation.  Additionally, it will raise $300 to $350 million per year for Northern Virginia and $175 to $200 million per year for Hampton Roads.

      “Finally, this plan will provide $300 million to the Dulles Rail Project – something I have fought tirelessly for over the past several years. The positive impact of this project on Northern Virginia and on our state as a whole cannot be understated. I am pleased that Virginia will finally make the investment necessary to get the project done and provide meaningful toll relief.

      “Unlike in Washington, D.C., in Virginia we can come together and compromise to find solutions to our problems. This plan is by no means a perfect, but I am elected to take tough votes and solve problems on behalf of my constituents and the citizens of our Commonwealth.  During my eight sessions in the Senate, I have worked with members of both parties in both chambers of the General Assembly to find a long-term, sustainable solution to transportation in Virginia. That is what this plan will do – help solve Virginia’s transportation crisis, strengthen our state’s economy and position us for long-term prosperity.”


    • Statement of Governor Bob McDonnell on General Assembly Passage of Historic Transportation Legislation

      RICHMOND – Governor Bob McDonnell issued the following statement today following final passage by the House of Delegates and the State Senate of a comprehensive long-term transportation funding and reform package for Virginia.

      “This is a historic day in Virginia. We have worked together across party lines to find common ground and pass the first sustainable long-term transportation funding plan in 27 years. There is a ‘Virginia Way’ of cooperation and problem solving, and we saw it work again today in Richmond.

      “Most Virginians and Americans are tired of the politics of dysfunction and inaction that we see in Washington. They prefer cooperation and results. They want elected officials to advocate for their principles and then find ways to work together to get things done and improve their daily lives. We do that in Richmond. For several decades now transportation loomed as an issue that seemingly could not be solved. Lines were drawn and debates droned on as motorists sat in traffic. Today we have shown a path forward, a path past the old political arguments and endless posturing that threatens the economic prosperity and competitiveness of our state and nation.

      “Every year, Virginians have been paying a hidden transportation tax. The Texas Transportation Institute found that our failure to approve new transportation funding, and the resulting congestion, cost every motorist in Northern Virginia $1,400 a year; every driver in Virginia Beach $877 a year; and every commuter in Richmond $581 a year. For nearly three decades, Virginians have paid a high price for our inaction on transportation. Their commutes have gotten longer as political positions got more and more rigid and unyielding. And that is a tax in and of itself. With this bill, gas prices will be reduced, and we will reduce our historic reliance on the gas tax which is in a long-term decline. Today we have stated unequivocally that transportation is a core function of government, by moving $200 million in future general fund dollars, and another $200 million from anticipated changes to federal law, to transportation. And we will allow Northern Virginia and Hampton Roads the resources they have long requested to address their pressing, local transportation needs. Through tax reform, general fund dedication, and economic growth, we will build a 21st century transportation network.

      “Over the past three years, we have cut spending, audited and reformed VDOT, authorized new bonds, used surpluses, issued new public-private partnerships for toll roads, created the Virginia Transportation Infrastructure Bank, and dedicated two-thirds of all undesignated surplus funds to transportation. We have used every tool provided by law to leverage scarce dollars. Yet those actions were not sufficient to meet the mobility, economic development, and quality of life needs of the people of Virginia. Today, we fixed the problem.

      “This is a compromise bill. It had to be. Neither party controls Richmond outright. The House is Republican, the Senate is split 20-20, and the Lieutenant Governor cannot vote on transportation funding.  On an issue like transportation funding, regional differences and needs are just as important as partisan affiliation. If we were ever going to fix this problem, and improve our citizens’ quality of life, a compromise had to be fashioned.

      “Virginia’s economy depends upon a modern transportation system. Without good roads, rail, transit and bridges we cannot attract the new businesses that will create the good-paying jobs our citizens need and deserve. A continued failure to dramatically improve transportation would leave the Commonwealth less competitive economically, shrink our tax base and endanger our well-earned reputation as the best state in the nation in which to do business. In fact, just last year CNBC dropped Virginia to third in its well-recognized annual ranking of ‘Best States for Business’, in large part because of our repeated inability to properly fund transportation. We plummeted from 10th to 33rd in the specific category of ‘Transportation and Infrastructure.’ That is unacceptable. I ran and was blessed to be elected on a pledge to make Virginia a jobs-magnet, and do everything I could to help our state attract more employers so our citizens could get the good jobs they need and deserve. This transportation plan helps us do that. Conservatives believe we must grow our economy by allowing the private sector to thrive and create. We believe in paying as you go and in not running up high levels of debt. That is how you create new revenue. But that can’t happen if we don’t provide private-sector job creators with the infrastructure they must have to be successful.

      “This vote is an important moment for Virginia’s economy, Virginians quality of life, and our political system. We have demonstrated that in Richmond we cut the rhetoric and we get results for the people. We have found ways to move from sound bites to solutions. We have passed, on a bipartisan basis, the first major new sustainable transportation funding and reform bill in Virginia in 27 years. I thank the over 60 percent of legislators in each chamber who voted for this bill and I thank Secretary of Transportation Sean Connaughton and his team and the many individuals and groups all across Virginia who have advocated tirelessly for this legislation from business to labor, and local government to technology. Specifically I would like to thank Lieutenant Governor Bill Bolling, Speaker Bill Howell, Majority Leader Tommy Norment, Majority Leader Kirk Cox, Delegate Chris Jones and all of the conferees. With this vote, we have made Virginia more economically competitive, improved our business climate, helped the private sector to create more jobs in the years ahead, and helped families spend more time together and less time in traffic. I look forward to receiving the bill in the days ahead, and, as with every piece of legislation we receive, conducting a thorough policy and legal review of the legislation for any amendments that may be appropriate.”

    • FreeDem

      The No votes can from the Democrats I admire the most. I’m happy in this company.

    • pontoon

      you don’t vote for a transportation bill without the Medicaid bill being tied to it.  Who is to say they’ll do anything about the Medicaid expansion now that foolish Democrats have given their approval to this albatross?

    • After spending most of this session discussing various options for addressing the Commonwealth’s transportation crisis, I am pleased to report that a bill has now passed both the House of Delegates and the Senate.

      While not perfect, if this bill is signed into law by Governor Bob McDonnell, it will raise the much-needed new revenues for transportation.

      As you know from my previous emails, Governor Bob McDonnell introduced House Bill 2313 which included several different funding provisions, including a tax cut, a tax increase, other fee increases, and reliance on a new revenue source that has not been available in Virginia in the past.

      The final bill that passed the House last night and the Senate today is a result of major negotiations and significant compromises made by both chambers through a lengthy conference process.

      The conference report that we voted on is dramatically different than the Governor’s bill as introduced, although one might be able to recognize some shadows of the original proposal.

      Let me be clear. What the General Assembly passed is not perfect and there are at least two or three provisions I oppose. Nevertheless, since the conference report was not an amendable document, we had to take it or leave it as is.

      Last night, I voted to support this version, as on balance, I believe there are more positive items in this package than negative ones.

      As described below, however, I will continue to seek further changes so that the final bill that Governor McDonnell signs will be the best product we can create to address our long-overdue transportation problem.

      Here are the details of what was in the conference report of the bill that passed the House yesterday and the Senate today:

      The Gasoline Tax

      The Governor’s original bill introduced in the House would have eliminated the 17.5 cents per gallon of gasoline tax. The Senate version kept this tax, increased it by 5 cents and also indexed it to inflation. In addition, the Senate version also would have added a new 1% tax on the sale of gasoline at the wholesale price.

      In a “split the difference” move, the conference report goes back to the original House proposal by ending the 17.5 cents tax at the pump. However, it also adds a NEW gas tax at the wholesale level of 3.5% for regular gas and 6% for diesel fuel.

      Importantly, the bill also includes an indexing provision so that the rate could be visited often to ensure that the tax amount is appropriate. This indexing requirement is not in the current gas tax law.

      Substituting the retail gas tax for a wholesale tax would result in a loss of about $230 million a year. However, this loss is made up for by increases in other transportation-related taxes as described below.

      Alternative Fuel Vehicle Fee

      The Governor’s proposal originally included a $100 fee on alternative fuel vehicles like hybrids, electric, natural gas and clean diesel (actually, it was a $50 increase as there is currently a $50 fee for such vehicles).

      I strongly opposed this provision because these are the types of innovations that will help our nation wean off of fossil fuels and lead us toward energy independence from overseas suppliers. Yet, if a consumer chooses to invest in these environmentally-sensible vehicles, they should not be punished by our state, which is what the Governor’s bill would have done.

      This dreaded provision was deleted on the floor of the House, and the Senate version had kept it out as well. That is why I was shocked when this provision was placed back in the conference report.

      I complained to the conferees that this fee should not have been brought back into the bill.

      Their explanation to me on why they added this back was that since the conference report eliminates the gas tax at the pump but adds a lower tax at the wholesale level, owner of cars that use gas will now receive a tax break, except for those cars that do not use gasoline. And since every vehicle – including electric, natural gas and others – damages the roads they drive on, the conferees believed it is fair to ask owners of these cars to pay a portion of the transportation maintenance cost.

      The conferees also conveyed to me and to other members that their intent is to add the new $100 fee to only those alternative cars that DO NOT use any gasoline, like the Chevy Volt. In other words, this fee WOULD NOT apply to owners of traditional hybrid vehicles like the Toyota Prius (which I happen to own) or Ford Fusion that use gasoline since owners of these cars will continue to pay the gas tax, even if at a lower rate than other car owners that have lower fuel efficiency.

      Unfortunately, when the conference report was drafted in a hurry last night, they left in the language of the alternative fuel vehicle from the earlier version of the bill that would apply to hybrids in addition to electric vehicles.

      Since the conference report is not amendable, we were unable to fix this error in the bill today, so this is an issue that we will need to work on as the bill moves to the Governor’s desk. I will continue to fight to eliminate hybrids from the alternative vehicles tax.

      Sales Tax Increase and NoVA-Specific Relief

      The Governor’s original bill would have raised the sales tax across all of Virginia by 0.8 cent from 5 to 5.8 cents per dollar. The Senate version would have authorized any county or city to enact a new local sales tax of up to 1% to pay for transportation.

      In another “split the difference” move, the conference report raises the sales tax for the entire state from 5 to 5.3 cents per dollar, but it also adds new Northern Virginia and Hampton Roads-specific provisions.

      For Northern Virginia and Hampton Roads, which are two of the most congested regions in the Commonwealth, the new sales tax rate would be 6% instead of 5%. However, both jurisdictions would be able to keep all of the 0.7% of the new taxes (6% minus 5.3%) raised within each’s borders to pay for their own transportation needs.

      For me, this is the best part of the conference report, and it is the most significant transportation solution our Northern Virginia region has ever had. This 0.7% tax increase guarantees a dedicated stream of approximately $350 million in new revenues that will be raised and spent exclusively in our region.

      The conference report includes strong language that prohibits the General Assembly from diverting a single cent out of this new tax that Northern Virginians will be paying for our own needs.

      For far too long, we have seen our tax dollars from Northern Virginia sent down to Richmond only to have it be spent elsewhere in Virginia. This new provision guarantees that we keep every bit of the $350 million we raise to be spent right here in Northern Virginia.

      Dulles Metro Expansion

      The Governor’s proposal and the Senate version would have dedicated $300 million to pay for the completion of Phase 2 of the Dulles Metrorail expansion project. The conference report keeps this provision, which will help our Northern Virginia region tremendously.

      Internet Sales Tax

      The Governor’s proposal had relied on what I’ve been calling “phantom moneys” to pay for one third of this entire transportation program. This was hypothetical tax revenues that may come into Virginia based on whether Congress passes the “Marketplace Equity Act,” which would allow states to collect out-of-state sales taxes on purchases made online.

      The Senate version would have required that, should Congress not pass this bill into law by July of 2014, Virginia would add an extra 1% tax to the wholesale price of gasoline, in addition to the new 1% tax that was described above.

      The conference report does a better job than the Senate version. It would require that if Congress does not enact the “Marketplace Equity Act” by January 1 of 2015, Virginia would add an extra 1.6% tax to the wholesale price of gasoline, in addition to the new 3.5% tax, which would bring the total gas tax to 5.1%.

      Mass Transit and Intercity Passenger Rail

      The conference report includes a positive feature that was not in earlier versions. The bill would fund mass transit and intercity passenger rail programs by dedicating some of the sales tax increase to this special need.

      While some of our traffic congestion problems can be alleviated with new or expanded roads, I believe we also need more mass transit options to keep people moving outside of having to get in their cars. This provision will generate new funds to pay for rail and transit options we have not had in the past.

      Additional Funding for Public Schools

      Finally, although this was a transportation funding bill, it included a side benefit for public education. Since the bill raises the state’s sales tax, it also sets aside a portion of that tax increase (1/8th percent) as well as a portion of new taxes that may be received from the Marketplace Equity Act to pay for education. This could result in an additional $150 to 200 million per year in state support for our schools.

      Why I Voted to Support this Conference Report

      On Friday night, the House of Delegates approved the conference report on a 60 to 40 vote, with 35 Republicans and 25 Democrats supporting and 33 Republicans and 7 Democrats voting against.

      Today, on a rare Saturday session, the Senate voted to approve the same bill on 25-15 vote, with 18 Democrats and 7 Republicans voting for and 2 Democrats and 13 Republicans voting against.

      Yesterday, I voted for the final passage as I believe this is the best bill that we could pass this year. Let me explain my rationale.

      First, in earlier emails, I said that I wanted a funding package that would raise over $1 billion of new revenues per year. The original House version would have raised about $850 million. The Senate version would have raised about $900 million. That is why I voted against both bills earlier this session.

      With the addition of the Northern Virginia and Hampton Roads provisions, the conference report could raise about $1.5 billion per year upon full implementation. This is a much larger amount than anyone thought was possible in this legislative session. This new amount met my requirement.

      Second, I said that I oppose eliminating the gas tax as I believe it is a logical stream of revenues that ties the purpose of the tax to the specific needs. In other words, the gas tax makes users of the road pay for the damage they create with their vehicles.

      I voted against the House version because it would have eliminated the gas tax altogether. The conference report, however, merely switches the tax from the retail level (at the pump) to the wholesale level (at the rack), which also switches the burden of the payment from the consumer to the gas distributor.

      While the dollar amounts are not revenue neutral, I believe that having a 3.5% tax at the wholesale level maintains the same principle of requiring gasoline users to pay for the use of that product.

      Additionally, I do not believe that Congress will pass the Marketplace Equity Act by 2015, which would mean that the effective gas tax will become 5.1% instead of 3.5%. At that point, assuming that price remains around the same $3.50 to $4 per gallon that we pay today, the total amount of the gas tax would meet or exceed the current fixed 17.5 cents per gallon that Virginia currently charges at the pump.

      Because this bill maintains the gas tax and adds an indexing feature, I thought the trade between retail and wholesale gas taxes was worthwhile.

      Third, I am very pleased that the conference report includes a Northern Virginia revenue package that would raise AND KEEP $350 million of our own tax dollars in our own region.

      Over the past four years that I have been in this job, I have spoken to thousands of constituents, and whenever the topic of transportation came up, most people told me that they would be willing to pay a little more tax if that money could be kept right here to solve our local traffic problems.

      This bill does exactly that by including a new Northern Virginia tax for Northern Virginia transportation needs.

      This Northern Virginia package is a solution that has eluded the General Assembly for 27 years. The last time that the legislature tried this “local option” in 2007, the Supreme Court struck it down as unconstitutional. The language in the bill we passed today has been cleared by lawyers to be constitutional.

      Finally, although I despise the fact that the conference report includes a fee for alternative fuel vehicles, I am hopeful that Governor McDonnell will correct the language to carve out cars that do use gasoline. Regardless of the fate of this provision, however, it is worth noting that the $100 fee is expected to generate only about $10 to $17 million per year.

      While I strongly oppose the “hybrid tax” issue, I have to decide whether it is worth supporting a bill that would raise $1.5 billion including $350 million for our Northern Virginia region, or oppose it based on a bad provision worth up to $17 million in the bill.

      In the end, I decided to support a comprehensive bill and work to eliminate the offensive provision separately.

      With any legislation, I have to consider all the pros and cons before voting on it. And with a bill as complex and important as this transportation revenue bill, I have spent countless hours, days and weeks working with every stakeholder to consider every aspect of it. I was one of the first Delegates to study this bill when it came to the House Finance Committee, and I reviewed every version carefully.

      I’m sure many constituents will agree with my vote and many others will disagree.

      Regardless of how you feel about this bill, I hope you will appreciate that this is the first time in over 27 years that the General Assembly has dealt with the ever-growing transportation crisis we are facing in Northern Virginia, and that we have put in place a workable solution that was supported by a strong bipartisan group of legislators.

      The bill now heads to the Governor for his consideration. I am confident that he will pass it into law, which means that beginning July 1, 2013, we will begin to see the benefits of this new transportation solution.

      Should you have any questions about this or any other issue, please do not hesitate to contact me at any time.