Virginia Transportation Funding Bill HB2313

Transportation problems in Northern Virginia are addressed in HB2313.  Some of it is disappointing.  But as much as we hate increased taxes designated for Northern Virginia, the lack of any comprehensive transportation reform since 1986 makes the 2013 Virginia Transportation Funding Bill a better-than-nothing scenario.   Although this bill represents progress for a transportation network in Northern Virginia which by all objective measures is a complete failure, it ignores commuter rail upgrades along I-95 & I-66 corridors. Northern Virginia will receive funding from this transportation bill.  But citizens will pay more than their share for new construction projects.

Virginia Transportation Funding Bill HB2313 is loaded with new taxes, including regional taxes for Northern Virginia to be spent for local projects as determined by the Northern Virginia Transportation Authority.  The NVTA board has members from the Counties of Arlington, Fairfax County, Loudoun County, & Prince William.  Along with the Cities of Alexandria, Falls Church, Fairfax, Manassas, & Manassas Park.  So residents of Stafford and Fauquier Counties escape paying the special assessments of this bill. Voting on future projects is weighted on the population of each jurisdiction.  Northern Virginia regional taxes are bit of a sore subject for its citizens.  Tax collections from our region routinely come back to its citizens at a rate of .30-.33 cents of each dollar sent to Richmond.  Northern Virginia special assessments are distributed among Virginia Planning District 8.

Ronald Wilson Reagan Memorial Highway in Prince William County.

The Bi-County Parkway would connect Dumfries Road (Route 234) and Interstate 95 Manassas exit 152 to Dulles Airport and the Loudoun County Parkway. This route would terminate at Harry Byrd Highway (Route 7) and become an alternative to the bumper-to-bumper rush hours on Centreville Road (Route 28) and Lee Highway (Route 29).

Additional Taxes
(1) The sales tax on new vehicles in Virginia will increase 40% from 3% to 4.3% of the total sales price. Expected revenue is $900M over the next 5 years.
 
(2) Labeled as the Regional Congestion Relief Fee the grantor’s tax on real estate transactions for property owners in Northern Virginia are increased by 0.25% (.25 for every $100 in sales price). Example: Selling a home for $500K equals additional transfer fees of $1,250. It obviously isn’t a flat tax in title fees on each transaction (see code section below).
 
(3) Staying at a hotel in Northern Virginia will cost an additional 3% of your bill through the Transient Occupancy Tax.
 
(4) Sales tax in Virginia rises from 5% to 5.3%, and Northern Virginia gets slapped with an additional .7% sales tax for a total states sales tax rate of 6%. Again, it appears legislators have determined Northern Virginia transportation upgrades will be addressed with the creation of regional special assessments. This tax doesn’t apply to food purchases.
 
(5) This bill includes funding from the Federal Marketplace Equity Act (HR3179). It allows states to charge sales taxes on internet sales. When HB2313 passed the Virginia General Assembly, HR3179 was still being drafted. If the bill doesn’t pass by January 2015 the sales tax on gas increases 1.7%.
 
(6) HB2313 charges an annual $100 license fee for alternative fuel vehicles. This seems to be a replacement tax for the gas taxes alternative fuel vehicle owners won’t pay when bypassing gas stations.
 
(7) Changes in the structure of gas taxes. No more flat rate 17.5% taxes on a gallon of gasoline. Prepare for more volatility in market driven pricing. The replacement tax is a 3.5% levy on wholesale gas prices (6% on diesel fuel). The higher penalty for diesel is based on the maintenance burden of commercial truck traffic. But I don’t agree with it. This change is a bad idea. When market demand drives prices lower, available funding for transportation funding disappears. When prices increase, so does the amount of tax you’re paying for gas. Why was the flat tax abolished? It allows members of the Virginia General Assembly to claim they had no involvement in raising gas prices and taxes. Rising prices and taxes on fuel becomes the fault of oil prices and market speculation. The logical assumption here is our state lawmakers are betting on gas prices remaining high into the foreseeable future.

Prince William Parkway at Dumfries Road in Manassas, Virginia.

The Prince William County Parkway from Manassas to Gainesville is designated as an alternate truck route. Its current use justifies connecting it to Dulles Airport and Loudoun County.

Revenue Created by HB2313 creates $3.5B for Virginia highways and rails during the next 5 years, and $880M annually after the initial 5 years. The bill creates $300-$350M for Northern Virginia transportation projects, and 30% of total revenues after the first 5 years. The calculated revenues of new taxes created by HB2313 follows:

(1) The increase in state taxes will add $1.5B during the next 5 years.

(2) Higher titling taxes on vehicles will add $1.2 B for 5 years.

(3) This bill immediately moves 200M from Virginia’s General Fund to transportation projects.

(4) HB2313 finances Phase II of the Metro Silver Line extension to Dulles International Airport by providing 300M from general funds. This project was created to make Dulles Airport more competitive with Reagan National Airport, and Baltimore-Washington International. HB2313 funding extends the line through Reston and Herndon to Dulles Airport and Route 772 in Loudoun County while adding 7 stations. Click here for updates and information about the Dulles Silver Line.

(5) This bill raises $300M-$350M each year by keeping an existing 2.1% in local fuel taxes. (6) HB2313 increases the percentage of the general fund for transportation from 0.5% to 0.675%. Funding the Future of Virginia Transportation According to the VTRANS2035 Report  investment priorities in Northern Virginia include high speed rail (intercity rail) between Washington, D.C., Richmond, & Hampton Roads. Metrorail expansion is mentioned in ambiguous terms.  There is also mention of connecting high speed rail with regional transit systems.  The report includes billions in transportation development and maintenance costs, future growth patterns, funding alternatives, and transportation priorities.  With so much talk about rail transportation in this long range report, it was surprising to see commuter rail improvements were not a priority of HB2313.2013 Virginia Transportation Bill HB2313 | The Moyers Team

After reading the VTRANS2035 Report prepared by the Virginia Office of Intermodel Planning & Investment for the Commonwealth Transportation Board, there is nothing in the report supporting the Route 460 Project, Coalfields Expressway, and Charlottesville Bypass.  I’m sure these regional transportation projects are helpful.  But they appear necessary only to spread transportation dollars across the state in exchange for legislative cooperation in the General Assembly.  The Route 460 Project will cost will be $1.4B when completed, the Coalfields Expressway in Southwest Virginia $2.8B, and the Charlottesville Bypass $240M in transportation dollars.  Instead of funding these projects, the money should have been invested in breaking the daily gridlock in Northern Virginia and Hampton Roads. The estimated cost of extending Metrorail on I-95 is $1.4B-$2.0B.  This could be funded immediately through the HB2313 Bill if $869M of the $1.2B  in 2011 federal GARVEE bonds weren’t spent on the 460 Project and the Coalfields Expressway.

Besides HB2313 ignoring the construction of commuter rail projects in Northern Virginia, residents get to pay for local and regional transportation projects, while remaining a cash cow for transportation upgrades in other parts of the state. It’s always been like this in Virginia.  I knew this bill would develop a regional tax, and separate taxing authority for Northern Virginia.  The projects funded by this regional assessment will be managed by the Northern Virginia Transportation Authority (70% to regional contracts, 30% to local projects where the money was raised).  The most disturbing thing about this bill unloading the responsibility of funding local and regional projects is the certainty that more tax money will be taken out of Northern Virginia to fund rural highway projects like those mentioned above.

But this bill may allow Virginia Transportation Secretary Sean Connaughton to divert funds to the Northern Virginia North-South Corridor with initial project costs of $1.0B and total of $5.5B.  This project will reduce commercial and regional traffic on I-95 at the Springfield Mixing Bowl while creating a cargo hub, and a 45 mile connecting route between I-95 at Dumfries to I-66 near Manassas, and continue to Dulles Airport, then across the Dulles Greenway to Leesburg Pike (Route 7) in Ashburn.  Secretary Connaughton appears anxious to fund it commenting this project should already be completed.  HR2313 may help fill his wishes.  Another major project which could benefit from the 2013 transportation bill is the Manassas National Battlefield Bypass.  But it’s route is not commuter friendly.

The VTRANS2025 Report indicates Northern Virginia growth by 2025 will require a connector route which bypasses the I-495 Springfield Mixing Bowl, and efficient commuter rails to avoid absolute gridlock.  HB2313 doesn’t directly address these upgrades, and after examining the growth estimates of the region it appears to be a problem.  I wanted an educated opinion on HB2313.  On March 1, 2013 I contacted Bob Chase, President of the Northern Virginia Transportation Alliance.  During our conversation he stated his organization supported the bill because it will be the only legislation to provide enough funding to improve the Northern Virginia transportation grid for the foreseeable future.   The Northern Virginia Transportation Alliance understands regional taxes to pay for transportation projects aren’t popular with citizens. But it wasn’t likely a transportation agreement without regional taxes would pass the General Assembly for Governor McDonnell’s signature.

The published opinion of HB2313 by the Northern Virginia Transportation Alliance states, “It’s been 26 years since we have had an opportunity of this magnitude.  If lost, it will not come again soon.”  I wanted his opinion of Metrorail extensions of the Blue Line (Vienna-Springfield, and the Orange Line (Vienna).  Mr. Chase detailed a discussion of the benefits of commuter rail versus bus transit in a commuter bus system with designated express lanes to high-demand drop points in Northern Virginia and Washington, D.C.  The analysis of transit studies by the Northern Virginia Transportation Alliance indicate a well designed regional bus express program with dedicated express lanes would be more effective in moving commuters along the I-95 & I-66 corridors during rush hours.  If a Metrorail extension were initiated, it would be the Blue Line to Centreville.  But the only area in Northern Virginia expected to have the population density to support a Metrorail extension is the Silver Line.  The initial construction costs, limited demand, and overall efficiency doesn’t make Metrorail a viable option.

As a lifelong resident of Northern Virginia I was stunned to hear there wasn’t enough demand for Metrorail Blue and Orange Line extensions.  I asked Mr. Chase why the Silver Line was approved, and extensions of the Blue and Orange Lines aren’t even a consideration.  He stated the Silver Line is more of an economic project with Dulles Airport which also supports a transportation corridor with a large enough population density in Reston and Herndon to make Metrorail service feasible.  I asked his opinion on the construction of the Northern Virginia North-South Corridor.  He fully supports its funding.  He mentioned it was an important addition to open transportation between Loudoun County and Prince William County.  He felt it was important to the long-term viability of business in Prince William County, as well as drawing traffic away from surrounding highways to reduce gridlock.  I mentioned Transportation Secretary Connaughton’s opinion on this project and he agrees with all of Mr. Connaughton’s positions of support for its immediate construction.

There will probably be legal challenges to HB2313.  The Virginia Constitution forbids the General Assembly can only impose taxes uniformly on similar activities.  This bill establishes a two-tier tax system for Hampton Roads and Northern Virginia. Article X, Section 1 of Virginia’s constitution requires all state taxes be uniform among all citizens within the same territory of the authority levying the tax.

Sources:

(1)  The Regional Congestion Relief Fee: Virginia Code 58.1-802.2.  The grantor’s tax increase in HB2313: §58.1-802.2. Regional congestion relief fee. “In addition to any other tax or fee imposed under the provisions of this chapter, a fee, delineated as the “regional congestion relief fee,” is hereby imposed on each deed, instrument, or writing by which lands, tenements, or other realty located in any county or city embraced by the Northern Virginia Transportation Authority established pursuant to §15.2-4830 is sold and is granted, assigned, transferred, or otherwise conveyed to or vested in the purchaser or any other person, by such purchaser’s direction. The rate of the fee, when the consideration or value of the interest, whichever is greater, equals or exceeds $100, shall be $0.40 for each $100 or fraction thereof, exclusive of the value of any lien or encumbrance remaining thereon at the time of the sale, whether such lien is assumed or the realty is sold subject to such lien or encumbrance. The fee imposed by this section shall be paid by the grantor, or any person who signs on behalf of the grantor, of any deed, instrument, or writing subject to the fee imposed by this section. Fees imposed by this section shall be collected by the clerk of the court and deposited into the state treasury; as soon as practicable, such fees shall then be transferred to the Northern Virginia Transportation Authority.”

(2) The 2013 Virginia Transportation Bill:  HB2313 Revenues and Appropriations of State

About the author:  Dwayne Moyers is a lifelong resident of Northern Virginia, hates sitting in traffic, and is a full-time real estate agent frustrated with the transportation network in the region.

Related articles:  Improving Northern Virginia Gridlock ,  Build the Bi-County Parkway,  The Prince William County-Loudoun County Parkway

Contact Dwayne Moyers at 540-446-6284 for help if your future includes buying or selling a home.