Quipping that "This may technically be transportation legislation, but at the end of the day, it’s a jobs bill," Governor Bob McDonnell signed Virginia’s new transportation funding bill — a bill Virginia Realtors helped pass.
The new law eliminates the 17.5-cent per-gallon gasoline tax (at the pump), replacing it with a 3.5 percent tax (at the distributor). This helps compensate for higher-mileage vehicles, which use less gasoline but still put the same wear and tear on roadways.
The bill also adds a new six percent Diesel tax, raises the state’s sales tax by 0.3 percent, raises the motor vehicle sales tax, and adds a $64 per year tax for hybrid and alternative-fuel vehicles.
The plan is expected to raise about $880 million a year by 2018 (or $3.5 billion over five years) much of it earmarked for transportation.
According to a report from Richmond-based Chmura Economics, over the next five years the new funding provisions are expected to…
- raise more than $1.8 billion for road maintenance
- provide $660 million for new construction
- fund public transit to the tune of $509 million
- provide more than $256 million for intercity passenger rail (including extending passenger rail service to Roanoke)
- "Generate additional revenue for Virginia’s airports and seaports"
Chmura estimates that new roadway construction coming out of the bill will generate $8.1 billion in "economic activity" and allow the state to pay for 10,133 jobs from 2014 through 2019.
Meanwhile, new transit and rail spending will generate $1.4 billion in economic activity and provide 2,925 jobs per year from 2014 through 2018.
(Caveats for the cynical: The report doesn’t clarify what "economic activity" means, and it doesn’t specify what kinds of jobs will be created.)
Further, according to Chmura, the transportation plan will "Generate annually between $272 million to $335 million in Northern Virginia and $172 million to $226 million in Hampton Roads for regional transportation priorities."
That will be done via increases to sales and hotel/motel taxes in those areas. (A considerable grantors tax was in play, but VAR fought to reduce that.)
You can see details about the plan at the state’s "Virginia’s Road to the Future" website.