Senate revises road bill: Gas tax in, toll panel out

RICHMOND

Gov. Bob McDonnell's transportation funding package is in tatters, with the Senate and the House of Delegates sharply divided over how to pay for maintaining and improving Virginia's overburdened road network.

The two legislative chambers seem to disagree over nearly every major transportation funding issue facing the General Assembly this year, except one: Neither wants any part of McDonnell's plan for expanded statewide tolling authority.

The Republican governor had proposed creation of a Virginia Toll Road Authority empowered to impose tolls for construction, maintenance, repair and operation of roads, bridges and tunnels anywhere in the state.

But lawmakers, some of whom have been rattled by public outrage in Hampton Roads over the imminent re-tolling of the Downtown and Midtown tunnels, appear ready to deep-six the statewide tolling plan.

Enabling legislation for the authority has been stripped from both the Senate and House versions of McDonnell's transportation package.

That removes a key pillar of the governor's road-building formula, leaving nothing in his toolbox except borrowing and shifting money from other state services. He has flatly ruled out any tax increases.

One idea for a modest boost in revenue - indexing the state gasoline tax so it will rise with inflation - gained some traction Wednesday in the Senate. But within hours, it was shot down in the House.

Virginia's 17.5-cents-a-gallon gas tax is lower than those in all surrounding states and has not been increased since 1986. Had it been tied to inflation back then, Sen. John Watkins, R-Powhatan County, told the Senate Finance Committee, it would have generated an additional $1.2 billion in transportation revenue.

Watkins is carrying one of several measures to add an annual inflation adjustment to the gas tax. His bill, SB631, would bring in an estimated $123.6 million a year in new revenue by 2018, but "it is not a tax increase," he assured the panel.

"We are not going to wish our way out of this problem," Watkins said. "And this doesn't solve it. It only stops the bleeding."

The committee agreed and advanced Watkins' measure to the Senate floor.

In addition, Sen. Frank Wagner, R-Virginia Beach, the Senate patron of McDonnell's transportation package, has incorporated a gas-tax indexing provision in that measure.

Asked whether the governor would be willing to accept the indexing feature, a McDonnell spokesman was noncommittal. But there was a telling moment when a member of the finance panel, Sen. Emmett Hanger Jr., R-Augusta County, asked whether anyone in the packed committee room from the administration could articulate the governor's position.

No one came forward.

The odds against the indexing idea became clearer later Wednesday when a similar bill from Del. Dave Albo, R-Fairfax County, was rejected by a Republican-controlled House subcommittee on a 6-3 party-line vote.

The panel killed the measure after a procession of witnesses, many from transportation-related industries, pleaded for its passage.

"The cost of maintaining our roads is going up every year and our revenue is going down," said Bob Chase, president of the Northern Virginia Transportation Alliance. He said the Virginia Department of Transportation has declared 27,000 lane-miles of the state's secondary roads substandard - enough to encircle the Earth.

The panel's action reflects the hard-line stance of the House's 2-1 Republican majority against anything resembling a tax increase.

"For many people in my district, this is a third rail," explained Del. Chris Head, a freshman Republican from Botetourt County, before casting his "no" vote.

Another point of deep division between the House and Senate is McDonnell's proposal to shift a portion of the revenue from Virginia's general sales tax, historically used for such services as education and health, to shore up the state's sagging transportation fund.

That proposal is part of the House transportation bill, but it has been stripped out of the Senate version.

"We cannot continue to rob the general fund," Watkins said. "We have obligations, particularly in education and health care, that we are not meeting."

Even one of McDonnell's more novel transportation funding ideas has encountered rough sledding in the legislature: his proposal to sell naming rights to roads, tunnels and other facilities to private entities.

That, too, has been excised from the Senate bill. It is still alive in the House, but several members of the budget-writing Appropriations Committee expressed concern Wednesday that it has an uncertain revenue potential and could lead to unintended complications.

The House version of the bill includes new language barring any names that are, among other things, obscene, descriptive of illegal activities or substances, or "socially, racially, or ethnically offensive or disparaging."

Del. Joe May, R-Loudoun County, muttered that he's not sure "whether this is real-ly going to be worth the agony."

Pilot writer Julian Walker contributed to this report.

Bill Sizemore, 804-697-1560, bill.sizemore@pilotonline.com