Virginia House GOP Transportation Plan Calls for Funding in Part by Insurance Premium Tax

January 6, 2005

Republicans in the House of Delegates plan to announce a $938 million transportation package that directs some money from the state’s general operating fund and some from the state tax on insurance premiums to transportation.

The proposal exceeds the $824 million initiative Gov. Mark R. Warner submitted last month but shares many characteristics of Warner’s plan, including paying off arrears on long-completed road projects.

According to a summary of House Republicans’ Transportation Initiative obtained by The Associated Press, $256 million is reserved for paying debt still owed on roads that have been in use for years.

It would provide $75 million localities can leverage to alleviate highway congestion problems, $33 million for a rail enhancement fund, $40 million for mass transit capital projects and $60 million for public-private transportation partnerships.

The House GOP plan would repay $90 million taken from the Transportation Trust Fund in recent years of fiscal crisis to balance the state’s general fund budget.

In the works since last summer, the House GOP transportation package joins Warner’s as the second of three competing transportation packages likely to dominate the 2005 General Assembly. A Senate transportation package expected later this month is likely to differ from the House plan by avoiding the use of general fund money.

Warner’s plan and the House plan are alike in that neither proposes additional taxes. They vary in that Warner’s plan is a massive one-time cash infusion while more than half of the House plan — $552 million — would be pledged for transportation years into the future.

Over the course of the state’s six-year master transportation plan, the House plan would provide an additional $1.8 billion, according to the summary.

Both plans rely in part on an expected surplus known to exceed $900 million, but the House plan would tap two different revenue sources:

• One-third of the insurance premium levy, projected at $127 million for the current budget and $138 million for the budget year that begins July 1, and;

• $100 million the House estimates will be generated by Del. David Albo’s bill that imposes substantial new civil fines on motorists for speeding, drunken driving, reckless driving or driving with a suspended license.

Albo, R-Fairfax County, proposes one of the nation’s most aggressive crackdowns on dangerous drivers. Administration officials, wary of a new round of budget shortfalls, question whether it would generate as much revenue as the House plan projects, risking unbalanced budgets years ahead.

The House plan calls for using money from the general fund to pay debt service on short-term loans the state obtained in 2003 against federal transportation money the state expects to receive.

Neither the House plan nor Warner’s proposal comes close to addressing billions of dollars in documented transportation needs.

“There just isn’t one silver bullet,” said G. Paul Nardo, aide to House Speaker William J. Howell, R-Stafford. “The needs are, what, $20 billion? You’re never going to be able to do all that in one fell swoop.”

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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