58.1-603.3 A Step in the Right Direction

58.1-603.3. Imposition of additional state retail sales and use taxes in certain regions.

A. As used in this section, unless the context clearly shows otherwise:

B. There is hereby levied and imposed, in addition to all other taxes and fees now imposed by law, a general retail sales and use tax at the rate of one percent in any urban region of the Commonwealth that has at any time an aggregate of at least 8.5 million daily vehicle miles traveled in the area in accordance with the most recent written determinations of daily vehicle miles traveled by the Virginia Department of Transportation. Based solely on this requirement, the Tax Commissioner shall be responsible for making the written determination of whether an urban region has met such requirement.

The tax shall be imposed on July 1 of the calendar year following the date of the Tax Commissioner’s written determination, with a regular session of the Virginia General Assembly intervening between the time of the written determination and the imposition of the tax.

The Tax Commissioner shall promptly provide a copy of any written determination to the Governor and the chairman of the House Committee on Appropriations, the House Committee on Finance, and the Senate Committee on Finance. The written determination shall include the date on which the tax shall be first imposed in the respective urban region.

(Sections C. through G pertain to what is subject to the sales tax. Food is excluded.)

H. The revenues generated and collected pursuant to the tax imposed under subsection B shall be deposited by the Comptroller into a special nonreverting fund within the state treasury for the respective urban region entitled the “Revenue Fund for the Urban Region of ……....” The Fund shall be established on the books of the Comptroller when the tax under subsection B is first imposed in the respective urban region. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund.

For the purposes of depositing such revenues into the Fund, there shall be deposited into the Fund an estimate developed by the Department of Taxation of such revenues to be received into the state treasury each month, net of the estimated applicable portion of any refunds to taxpayers and after subtraction of the direct costs of administration by the Department of Taxation. Such estimated deposits into the Fund shall be adjusted for the actual net revenues received in the preceding month.

I. Except as otherwise specifically provided by law, the net revenues generated and collected from the tax imposed under subsection B shall be allocated by the Commonwealth Transportation Board solely for transportation projects in the respective urban region that are included in the federally mandated Regional Transportation Plan approved by the metropolitan planning organization for the respective urban region (or any successive plan).

As outlined in previous posts, the Fredericksburg Metropolitan Planning Organization (FAMPO) has spent the last two years reorganizing itself and planning to meet our region’s future transportation challenges. Over the next few months the public will begin to see the results of these efforts—

--A multi-modal (cars, trains, buses, trails) transportation plan based on a comprehensive review of the development plans of member jurisdictions.

--An approved set of guidelines to prioritize transportation projects based on categories such as safety, congestion mitigation, and cost-to-benefit.

--Plans to look beyond large transportation projects to consider smaller, and possibly more cost effective, projects; i.e., adding turn lanes, intersection improvements, etc.

--Finalizing plans with VDOT to allow local jurisdictions more authority in planning and building secondary roads.

--A policy to ensure public involvement in discussions on regional transportation.

FAMPO has done, and is doing, everything it can do to ensure that transportation dollars spent in this region have the maximum positive impact in meeting our transportation needs. We now need help to ensure we have sufficient resources to meet our future needs.

Our current Constrained Long Range Plan (CLRP) through 2035 identifies $1.4 billion dollars available to our region. FAMPO has identified almost $7 billion in projects to maintain a passable transportation system. As local elected representatives, we will need to review our respective Comprehensive Plans to bring them more in line with the resources available. In turn we must expect our elected representatives in Richmond to recognize the growth rate for this region and provide realistic funding.

For the past two years, we have taken every opportunity to remind our representatives in Richmond that we are the fourth largest and fastest growing region in the Commonwealth and that the current process and funding dynamic for meeting our transportation needs is inadequate. As the current Special Session on Transportation opened, two members of our delegation had taken steps to address this issue.

Delegate Mark Cole introduced two bills, HB601 and HB603, that change the current funding formula. HB601 would allocate transportation dollars based on the number of vehicles registered in a jurisdiction, while HB603 would allocate funds based on population. Either bill would benefit this region but neither has any chance of passing. In a recent interview on the special session, Governor Kaine echoed the position of a majority of General Assembly members when he said, "I don't think that's helpful to Virginia. I don't think it's helpful to get in a deep allocation debate that pits one region against another.” So we will put off that critical discussion for another day.

Senator Houck attached an amendment, 58.1-603.3, to Transportation Bill SB6009 which imposes a one cent sales tax (excluding food) in areas serviced by an MPO where there are more than 8.5 million daily vehicle miles a day. FAMPO would easily qualify under these conditions. What would this amendment mean to us?

Over the coming years FAMPO can expect transportation funding at a level of between $28 to $30 million dollars. A one-cent increase in the sales tax as outlined in 58.1-603.3 would generate an additional $36 million dollars-- more than double funding for transportation within the MPO.

I would prefer that the jurisdictions of the MPO be given the option of imposing this tax; i.e, all three MPO jurisdictions – Stafford, Spotsylvania, and Fredericksburg – would have to make the case to residents of the need for the tax increase. We plan to begin the public involvement phase of our CLRP review at the end of this summer and this would provide the forum for such a discussion. However, in making this recommendation I would have to acknowledge the hypocrisy of my position after I have on numerous occasions criticized our state representatives for pushing off the tough decisions onto local governments.

I have also read some criticism of the proposal since the Commonwealth Transportation Board would have the final say on what projects the money could be spent on. As noted in the legislation, that decision would be based on “federally mandated Regional Transportation Plan.” The CTB would be picking the projects from a list provided by the FAMPO. While I would question the need to involve the CTB, I understand the rationale of working under the current process. We can, and must, deal with the process another day.

While I have some issues with Mr. Houck’s legislation, I have to acknowledge that this is an effort to address an issue that FAMPO has been putting forward for years. There are also the political realities consider — what we can realistically expect to have some small chance of passing.

While there are big issues still unresolved – the funding formula, reforming the process, and more local control of transportation projects – 58.1-603.3 represents a step in the right direction. Finally, there is an acknowledgement that there are regions in the Commonwealth beyond Northern Virginia and Hampton Roads that face transportation challenges. I believe FAMPO is prepared to make the case that the additional funding is needed and will fund projects that will have a positive impact on the region’s transportation system.

The political reality is that SB3009 will be used by both sides to meet perceived political objectives – either to show one side’s commitment to raise taxes or pointing to the inaction of the other. It does not look like Richmond has reached the point where the transportation needs of the Commonwealth trump political considerations. However, should we be surprised and some compromise is reached, I would hope that Senator Houck’s amendment in some form is part of it.

If you agree with the position to support Houck’s amendment 58.1-603.3 I would urge you to contact your elected representatives in Richmond. If not, please provide alternatives to meet our transportation needs.