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Senate passes tax hike
The gridlock continued Wednesday as the General Assembly entered day three of its special session to resolve the state’s transportation issues. A handful of competing plans are working their way through the legislature but it seems unlikely that any will be enacted.Gov. Tim Kaine (D) has proposed a series of tax increases aimed at funding transportation but his plan has been met with overwhelming hostility in both houses. The funding package has been held in limbo since Monday by the House and Kaine does not have a sponsor in the Senate.
Senate Democrats, led by Fairfax Sen. Dick Saslaw (D-35th), have approved a competing series of tax hikes that may be acceptable to Kaine, but the House of Delegates has vowed to kill any tax increases.
“I don’t know how you solve transportation problems of the magnitude we have in this state with no money,” Saslaw said on Wednesday.
House leaders have been working to position the senators as the ones causing the roadblock. Speaker William Howell (R-28th) has refused to allow any revenue bills to be heard in the House until the Senate adopts a plan of its own. On Wednesday, as the Senate was poised to adopt Saslaw’s tax plan, Howell convened a House committee meeting to hear Kaine’s proposal, though he said the committee would not vote until after the Senate has acted on its own bills.
Kaine’s plan would raise the annual vehicle registration fee, the tax on car sales and the grantor’s tax. The plan also includes 1-percent sales tax increases in Northern Virginia and Hampton Roads to pay for regional transportation projects.
But the bill has no chance of clearing the House and the only question on Wednesday evening was how long it would take delegates to kill the measure.
The primary legislation passed by the Senate was Saslaw’s tax increase package, which includes a 1-cent-per-gallon gas tax increase each year for the next six years, a ¼-percent increase in the sales tax and a ½-percent titling tax on car sales.
Saslaw estimated that the gas tax hike would mean the average driver pays an extra $7.50 each year to fuel up.
“For that price, he has to give up one-and-a-half Big Mac meals per year,” Saslaw said. “That ain’t a lot.”
To offset the extra pain at the pump, Saslaw’s plan would remove a ½-percent sales tax on food, which he said would save a family of four about $50 a year.
The Saslaw plan also includes regional packages for Northern Virginia and Hampton Roads. Northern Virginia residents would pay an extra ½-percent sales tax, a 40-cent increase in the grantor’s tax and an additional $5 per night on hotel rooms. That package would raise $340 million per year for Northern Virginia projects, Saslaw said. Hampton Roads residents would pay similar tax increases for their road projects.
Prince William Sen. Chuck Colgan (D-29th) had a competing tax plan but pulled it after his committee adopted Saslaw’s bill.
“I think it might just add to confusion to have two bills go into the House,” he said.
Colgan went on to endorse Saslaw’s plan on the Senate floor, arguing that it will save residents money in the long run because it will get traffic moving.
“This is a cost-effective tax measure. This bill is actually going to save people money,” he said.
The House of Delegates is expected to waste no time in killing the measure.
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