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Examiner Local Editorial: Nothing 'revenue neutral' about transportation bill

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Opinion,Local Editorial

Virginia's just-passed transportation bill shows why the hoary cliche comparing legislating with sausage-making remains apt. What originally started out as Del. Tim Hugo's, R-Centreville, revenue-neutral plan to replace dwindling proceeds from Virginia's 17.5-cent gas tax with a slight increase in the state sales tax to pay for transportation improvements was ground up in Richmond and extruded as an unsavory tax increase.

What does a Medicaid expansion have to do with road building and pothole filling? Absolutely nothing, but Senate Democrats insisted on throwing it into the meat grinder anyway. Desperate to compromise, Gov. Bob McDonnell and enough Republicans agreed to add this unnecessary extra ingredient to a mix made even more unpalatable by a 1.3 percent increase in the hated car tax.

The result, as a Wall Street Journal editorial noted, is "a five-year, $6 billion transportation bill financed almost entirely with higher sales and car taxes." It penalizes taxpayers for lawmakers' decadelong failure to properly prioritize spending on transportation even as they doubled state spending until road maintenance needs started cannibalizing construction funds.

If he signs this version of legislative sausage, McDonnell will violate his own 2009 campaign pledge not to raise taxes on Virginians or voluntarily expand Medicaid, which already consumes nearly a quarter of the state budget.

Even as it increases the cost of titling a car and driving a hybrid, the bill reduces the retail gas tax. But it increases the wholesale gas tax, so the net effect will be even higher prices at the pump. The nonfood state sales tax will go up 0.3 percent, but residents of Hampton Roads and Northern Virginian will pay an extra regional surcharge of 0.7 percent, even though they already send more money to Richmond than they get back.

On the plus side, all new regional taxes collected must be used for new road construction. But the bill allocates $300 million for the Dulles Rail boondoggle and $110 million for intercity passenger trains and mass transit -- which already get a disproportionate share of funding. And while McDonnell's landmark legislation ends the official taboo about transferring money from the general fund to pay for transportation, its massive tax hikes and expansion of Medicaid far outweigh these advantages.

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