Read their lips: No new transportation bills with taxes

RICHMOND

The General Assembly will begin a special session Monday to try to solve Virginia's transportation woes, and the only mystery might be how many days pass before lawmakers adjourn in futility.

"Why are we wasting the taxpayers' money holding this session?" said Del. Kenneth Alexander, D-Norfolk. "There's no political will to do anything."

"What are the chances of being successful in the special session?" said Sen. Kenneth Stolle, R-Virginia Beach. "Slim and none if we continue down the same path that we're going down right now."

No issue in recent decades has knotted up the General Assembly more than improving transportation. The core of the debate has not budged since 2000: Should Virginia impose new taxes to keep pace with its swelling needs to build and maintain roads?

Gov. Timothy M. Kaine is asking the legislature to impose a $1 billion package of tax increases. He says it will improve the safety of roads and bridges, relieve congestion and expand hurricane escape routes from Hampton Roads.

The legislature, however, has a long record of killing the very tax increases Kaine seeks. Since 2003, lawmakers have spiked 62 bills to raise the general sales taxes, eight bills to up the sales tax on cars and two measures to increase the grantor's tax on parties who sell homes.

Alternative tax increases pushed by some legislators have faired just as poorly. Efforts to raise the gas tax have failed 31 times since 2003; eight bills to increase the recordation tax that is paid when a new home is being built have been spiked.

The proposals usually have died in the House of Delegates, controlled by conservative GOP leaders who adamantly oppose new taxes for roads. Their only concession has been a willingness to give each city and county in Hampton Roads and Northern Virginia the power to raise some new taxes for road projects.

The graveyard for most of the bills has been the 22-member House Finance Committee, led by Del. Bob Purkey, R-Virginia Beach. The 13 Republicans who control the panel have long records of voting against new levies. Nine have signed oaths to oppose all tax increases, according to Americans for Tax Reform, a public interest group that wants to reduce the size of government.

Speaker William Howell, R-Stafford, plans to send Kaine's bill to the Finance Committee.

"I wouldn't bet on the governor's bill," Howell said last week. "I don't think the governor would bet much on it, either."

In the Senate, a coalition of Democrats and moderate Republicans has passed three major tax increase packages since 2004 that were shot down by the House Finance Committee.

That coalition, however, has not united this spring behind Kaine's bill. Senate Majority Richard Saslaw, D-Fairfax, is insisting on a gasoline tax increase - a step Kaine and many other Democrats are reluctant to take at time when gas prices are at record highs.

Several Republican senators who have supported tax increases in the past say they can't do it this year in the midst of tumultuous economy. "People are hurting," Stolle said.

Kaine says the legislature must act now to keep pace with soaring road needs.

While lawmakers have been locked in debate, the price of road-building materials - such as iron, steel, concrete and asphalt - has increased 59 percent since 2003, according to the American Road & Transportation Builders Association. The Virginia Department of Transportation has felt the sting: In 2004, $10 million would pay for 282 lane miles of paving in Virginia; last year, it would have paid for 185 miles.

By law, Virginia is required maintain its existing roads before building new ones. If new transportation revenues are not found, Kaine warns that money for new construction will dry up in 2015. House Republican leaders say the governor is presenting a worse-case scenario.

In calling the special session - the second in three years devoted to finding a transportation plan - the Democratic governor is asking lawmakers to increase:

- The sales tax by one penny on the dollar in Hampton Roads and Northern Virginia, with an exemption for food and over-the-counter medicines.

- The 3 percent sales tax on vehicles to 4 percent.

- Annual vehicle registration fees - now $49.50 for most cars - by $10.

- The grantor's tax on parties who sell homes by 25-cents per $100 of sale price.

Kaine's plan would pump more than $200 million a year in new revenues into Hampton Roads. The money would jump-start many of the region's long-sought road projects, including a third bridge-tunnel linking the Peninsula and South Hampton Roads and expansion of the Hampton Roads Bridge-Tunnel, the Midtown Tunnel and U.S. 460. All the projects, total ing in the billions of dollars, would be supplemented by placing tolls on the new or improved roadways and bridges.

Kaine's plan comes after the collapse of a compromise transportation bill the General Assembly approved last year. It was crafted to raise transportation money while technically allowing legislators to avoid a direct vote on increasing taxes.

The measure empowered unelected boards in the Hampton Roads and Northern Virginia to raise regional taxes for transportation. It was deemed unconstitutional earlier this year by Virginia's Supreme Court, which noted that only elected leaders can raise taxes.

Kaine says he is not asking House Republicans to betray their anti-tax principles. With the exception of the increased sales tax on vehicles, Kaine notes that all of the levies he is proposing were included in the bill House Republicans supported last year that was overturned by the state's high court.

But there is a vital distinction that Kaine grudgingly acknowledges. Last year, lawmakers voted to give regional authorities in Hampton Roads and Northern Virginia the option of raising those taxes. This year, Kaine's bill requires legislators to impose the taxes themselves.

"The time for hiding and grandstanding and smoke and mirrors is over," Kaine said. "We need something. This is very important. It has to be that the General Assembly casts votes."

House GOP leaders disagree. The say there is an "easy fix" to last year's unconstitutional plan. To comply with the court's ruling that only elected bodies can impose levies, the Republicans said they merely need to empower city councils and county boards in Hampton Roads and Northern Virginia to raise certain taxes now controlled by the state legislature.

Howell says the House is not trying to duck a tough vote. "We think local governments should play a big role in transportation," he said.

Kaine and many Democrats say the GOP's plan could thwart any hope of regional road improvements in Hampton Roads. Not all local governments in the region support the tax increases. City councils in South Hampton Roads have been more receptive to increasing taxes for transportation than those on the Peninsula.

In Northern Virginia, one of the most congested regions in the nation, local governments are largely in accord about raising taxes for transportation.

Some other proposals also have emerged. Stolle, for example, wants to ask the federal government to stop requiring Virginia to pay $500 million a year for maintenance of interstates. Instead, Stolle proposes placing tolls on all interstates and using the proceeds for upkeep. The $500 million could then be used for state road maintenance.

Stolle also wants to redirect 30 percent of all future increases in tax revenues from Hampton Roads ports to local transportation projects. Those port-related taxes currently are used for other state services. Some worry that diverting new revenues will mean less money in the future for education, health, public safety and other state government services.

Kaine is not insisting the legislature adopt his exact proposal but is demanding passage of a broad-based tax package. He is pledging to campaign against the 2009 reelection of any Republican delegate who stands in his way.

"I'm convinced that voters want problem-solvers, not problem-avoiders," he said.

There might be little consequence for Hampton Roads lawmakers who oppose the tax increases, however. Only 24 percent of voters in the area support a regional sales tax for roads, according to a poll conducted in late April poll by Christopher Newport University.

The survey found that 53 percent of Hampton Roads voters do not trust the government's promise to use the tax increases for transportation. They worry the money will be diverted to other causes.

Kaine is proposing a "lockbox " he says would legally guarantee that the new tax money would be used on roads. The General Assembly has never liked that idea. Since 2003, it has killed 59 bills to place lockboxes on transportation funds amid arguments from budget writers that their hands should not be tied in the event of a financial crisis, that lockboxes are unenforceable gimmicks, and that it is equally important to ensure that money for education, health and public safety is not raided to build roads.

Howell objects to the governor's depiction of Republican delegates as problem-avoiders. He says the General Assembly made substantial transportation progress last year by passing a series of creative reforms that will ease congestion over time.

The legislation, sponsored by Howell, requires fast-growing localities to cluster some new development around existing roads. It also clarifies policies that allow private construction companies to pay for building roads, tunnels and bridges and recoup their investments plus profit through long-term tolling rights to their projects.

In addition, the General Assembly authorized $3 billion in borrowing for roads over 10 years, using a tax on auto insurance to pay back the money. Six times this decade, legislators have directed surpluses at the end of budget years to transportation, totaling $981 million.

"I don't know why people are saying House Republicans are being obstructionists," Howell said. "We have a plan."

Warren Fiske, (804) 697-1565, warren.fiske@pilotonline.com

Julian Walker, (804) 697-1564, julian.walker@pilotonline.com