Senate Democrats Support a New Plan: A Long-Term, Sustainable Transportation Solution

Bipartisan plan will raise $900 million a year for statewide transportation when fully implemented

RICHMOND, VA — Today, Senate Democrats on the Finance Committee voted for a transportation compromise proposed by Senator Frank Wagner. The bill passed the committee on a bipartisan vote of 9 to 6, with every Democrat and several Republicans supporting.

Senator Richard L. Saslaw (D-Fairfax) said, “This is a good plan that will finally begin to solve our transportation funding problems. It raises the revenue our state desperately needs to repair our roads and begin long-delayed new construction. Governor McDonnell and the House of Delegates should take this plan very seriously, and I look forward to moving this legislation forward.”

Senator Janet D. Howell (D-Fairfax) said, “A proposal like this has been long overdue. I’m pleased the committee voted for this serious, long-term plan to fund our transportation needs. This plan also gives the congested urban parts of our state the flexibility they need to begin solving their unique transportation problems. This is a good plan, and I look forward to working towards a proposal with the House of Delegates and Governor McDonnell.”


Background

This plan raises the gas tax by 5 cents and indexes it to the cost of the construction materials it takes to build roads. It imposes a new 1% tax on wholesale gasoline (a “rack tax”), and increases the car registration fee by $15.

The plan directs an additional 0.05 percentage points of the state sales tax toward transportation.

In the event the Marketplace Equity Act (MEA) passes Congress, two-thirds of that online sales tax revenue will be earmarked for transportation. Just under 20% will be directed to public education, with the balance going to localities. If the Marketplace Equity Act fails to pass, the wholesale gas tax mentioned above will rise to 2%.

The plan also gives the three heavily congested urban regions the flexibility to raise revenue to address their unique transportation needs. Northern Virginia, Hampton Roads, and Central Virginia will each be allowed to create and earn revenue from a new regional sales tax of up to 1%.
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