A Northern Virginia lawmaker is proposing a complex tax plan to fund transportation projects that he said could finally break the decadelong logjam in the General Assembly over how to pay for new roads.
Del. Dave Albo, R-Springfield, said his proposal could net the state $1.2 billion a year by raising taxes on gasoline, restaurant meals, hotel stays and out-of-state corporations working in Virginia.
To ensure that out-of-state visitors and corporations pay most of the new taxes, Albo proposes lowering the state income tax rate by 0.2 percent and abolishing the 2.5 percent tax on food to offset the hit Virginians would take from the other tax increases.
Albo's plan offers a possible alternative to one suggested earlier by Gov. Bob McDonnell, a fellow Republican who proposed abolishing the state's 17.5-cents-per-gallon gas tax and raising the sales tax to make up the loss and generate new income for roads.
|A closer look|
|Del. Dave Albo's transportation proposal:|
|» 5 percent tax on wholesale gasoline: $733 million|
|» New taxes on out-of-state corporations: $250 million|
|» Online sales tax: $255 million|
|» Eliminate sales tax exemption for nonprofits: $79 million|
|» Increased taxes in Northern Virginia and Hampton Roads (hotel tax, vehicle registration, restaurant tax, sales tax): $550 million for those areas|
Albo said some Republicans won't support McDonnell because they view the gas tax as a desirable user fee on people who use the roads.
"There are people who don't drive very much who aren't going to be happy," Albo said.
Albo's plan draws from a number of past proposals that failed in the General Assembly, including a bipartisan plan to impose a 5 percent tax on wholesale gasoline. He also wants to create a 2 percent hotel tax and charge new residents a 1 percent tax for registering vehicles.
Northern Virginia communities desperately in need of transportation funding would be allowed to raise new revenue on their own. Fairfax, Loudoun and Prince William counties would be allowed to impose a 4 percent tax on food and beverages. Other Northern Virginia communities would be allowed to raise their sales tax by 0.5 percent. All of the new revenue would have to be used for local roads.
Out-of-state corporations doing business in Virginia would have to pay a corporate income tax, and nonprofit organizations would no longer be exempt from the state sales tax under Albo's plan.
Like McDonnell's plan, Albo's would charge owners of alternative-fuel vehicles an annual fee and tax Internet sales as soon as Congress authorized such levies.
McDonnell and Republican House Speaker Bill Howell are both still working to pass McDonnell's transportation plan and on Wednesday announced they'd won the support of House Transportation Committee Chairman Joe May, R-Leesburg, and House Finance Committee Chairman Bob Purkey, R-Virginia Beach.
"A lot of you have had ideas over the last 10 or 15 years that haven't worked. Give the governor's plan a chance," said Del. Tim Hugo, R-Centreville. "The perfect is the mortal enemy of the good."
Albo credited McDonnell for his work on transportation but said he wants to take it further.
"The governor has done something that's very valuable. He has put a ball on a tee, and he pulled out a 5-iron to try to solve the problem," Albo said. "We want to play the same ball, we just want a different club. We want a 3-wood."