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, April 02, 2006

Budget version has more than transportation plan ; B1

Senate now includes changes to tax credits, fees for abusive drivers

By Garren Shipley
(Daily Staff Writer)

The fourth version of the Virginia Senate’s budget and transportation plan has something in it for almost everyone. But the House of Delegates still isn’t buying it.

The proposal — welded on to House Bill 5001 as it came through the upper chamber — passed 38-0 on Wednesday after hours of wrangling over how much ground to give towards the lower chamber in the ongoing budget standoff.

Regardless of the Senate’s action, the House will only be meeting in a “pro-forma” session on Monday. Only a handful of delegates will be on hand to go through the constitutionally required form of calling the session to order and adjourning it.

House leaders have said they have no interest in bringing all of the delegates back to Richmond until a final deal is reached by budget negotiators.

This time, though, the Senate version has more than just a transportation plan on board.
Changes to the estate tax and conservation tax credits are just some of the unfinished business from the regular session added by the Senate Finance Committee.

The House and Senate previously deadlocked on changes to tax credit program, which gives income tax credits to landowners who preserve rather than develop their acreage.

Delegates wanted to see the program expanded, while the Senate pressed for limits on the size of donations and the overall size of the program.

“We like the program” as it stands, said John Eckman, executive director of the Valley Conservation Council. “If we have to see reform, we’d prefer to see a cap on individual donations, rather than a cap on the [total] program.”

But changes should be talked about on their own merits, he said, and including any changes in the ongoing standoff over transportation muddies the water.

The transportation section of the bill has a lot in common with previous incarnations, including an $843 million, four-year increase in the grantors tax to fund local transportation projects and $369 million taken from the general fund, spread over two years.

Gone is the oft-derided 5 percent, refundable gasoline sales tax.

“I know you were all enamored with [the refund proposal], but we just felt the need to remove that,” said Finance Committee Chairman Sen. John H. Chichester, R-Fredericksburg, speaking on the Senate floor Wednesday.

In its place is a 6-cents-per-gallon tax on fuel terminal operators, which would raise more than $250 million per year if enacted into law. Companies that distribute gasoline, diesel and other motor fuels inside the state would be liable for the “Baghdad tax,” as it quickly came to be known.

Calls for raising some “user fees” on transportation are justified, according to one area car dealer. But government can only go to the well so many times before it starts to do more harm than good, said Rex Morrison, sales manager at Woodstock Garage.

Morrison said money for roads has to be raised, but putting too much of the burden on drivers and car dealers could backfire in the long run.

Higher fees for registration, gas taxes, and a 25 percent increase in the sales tax on cars and trucks is bound to eat away at the bottom line, Morrison said, and that makes it harder for car dealers to support their communities.

“Somebody’s got to drink some poison somewhere,” he said.

In total, the fourth version of the Senate’s plan contains about $1 billion in new funding each year for transportation, including $2.27 billion for the Virginia Department of Transportation’s construction budget.

It also contains $843 million over four years in the form of a controversial local grantor’s tax.

Local real estate groups and home builders have said the tax would further drive up the costs of housing in Virginia and make entry-level homes that much harder to find.

Also included in the Senate’s version of House Bill 5001 are:

• Abusive driver fees, at $48 million per year, this time set aside to fund law enforcement retirement programs rather than transportation.

• Language related to the TransDominion Express Authority, charged with working out passenger rail service from Washington and Richmond to Bristol and points in between.

• The Senate version of the estate tax repeal, which exempts farms and estates valued at $10 million from the “death tax.”