The Northern Virginia Daily's Political Depot

A service for our readers outside the Northern Shenandoah Valley... a sampling of The Daily's political coverage, plus unofficial, 'reporter's notebook' stuff. And occasional dry humor...

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Location: Strasburg, Virginia

Sunday, February 19, 2006

Valley’s senators take opposing sides on bill: A1

By Garren Shipley
(Daily Staff Writer)

The two members of the Northern Shenandoah Valley’s delegation to the Virginia Senate came down on opposite sides of the panel’s transportation plan Friday.

Both state Sen. H. Russell Potts Jr., R-Winchester, and state Sen. Mark Obenshain, R-Harrisonburg, took to the floor to argue their points of view, according to statements released later.

Billions of dollars in new taxes on cars, gasoline, houses and bad driving may be painful, but they’re the only way to fix problems in Northern Virginia and Hampton Roads, Potts said.

“The only way we fix this is with long-term, consistent stable, reliable revenue streams,” said Potts, addressing the Senate.
Taking money from the state’s general fund, as has been proposed by the House of Delegates, is simply a bad idea, he said.

Virginia will need money in this year’s surplus to pay for bigger bills coming down the pike.

“Next year the state of Virginia is going to get hit with the worst hit in history on Medicaid reimbursements,” Potts said, referring to federal efforts to shift more Medicaid costs, traditionally a federal-state partnership, to the state level.

“This is going to be a long-term investment, and that’s why it cannot be out of the general fund,” he said.
Obenshain praised those who worked on the plan, but said he had serious concerns about how it would work.

“There are severe problems with the mechanics of it, and there are severe problems with the equity of it,” Obenshain said.

Both the new “rack rate” gasoline sales tax and increase in the grantor’s tax on homes are hitting people who can least afford it.

Those people who are the least likely to keep their gasoline receipts and turn them in for reimbursement are also the least likely to be able to pay for higher gas costs, he said, referring to a mechanism for motorists to get partial refunds of the gas tax.

“There are $180 billion worth of coupons issued annually in the United States, and about 1.3 percent of those coupons are actually redeemed,” he said.

“I can’t support this bill and go back to the Shenandoah Valley with the surplus that we’ve generated over the past couple of years,” Obenshain said.

Virginia ended fiscal 2005 more than $500 million in the black, and projections call for the state to rack up another $1.3 billion by the end of fiscal 2006.

Obenshain was one of six senators who voted against the measure Friday.

The vote came as no surprise to the Blue Ridge Association of Realtors, according to a former member of House of Delegates. Winsome Sears, a Republican from Norfolk who serves as the group’s spokeswoman, said the Senate should be looking elsewhere for transportation funds.

Housing is already taxed to the hilt in Virginia, she said. A $200,000 home now incurs more than $1,600 in fees and taxes when the transaction is completed.

And in the Northern Shenandoah Valley, where there are few $200,000 homes being sold, the burden is even higher.
“The average price of a home in Winchester is $308,000, in Frederick County it’s $322,000, and more than $400,000 in Clarke County,” Sears said.

“Housing is not a luxury,” she said. “People need shelter.”

The Top of Virginia Builders Association also took a dim view of Friday’s events.

“It’s just one more addition to the cost of a house,” not that the House of Delegates plan is much more of a prize, said the association’s president, J.P. Carr.

While it doesn’t raise taxes, it extends voluntary proffers to the vast majority of local governments and encourages them to use those funds with some state money to build road projects locally.

“I don’t think proffers are a good model. They’re not sustainable. If we have a slowdown in the housing market, they disappear,” Carr said.

The House and Senate will begin negotiations in earnest next week after budget writers on both sides introduce their version of the state’s two-year spending plan on Sunday.